Bar Harbor Bankshares(BHB) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights This section provides an overview of Bar Harbor Bankshares' second quarter 2025 performance, strategic developments, and dividend declaration Second Quarter 2025 Performance Overview Bar Harbor Bankshares reported a decrease in GAAP net income for Q2 2025 compared to Q1 2025, while core earnings remained stable, with an expanding net interest margin Second Quarter 2025 Financial Performance | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | | :----------------------- | :------ | :------ | :----------- | | GAAP Net Income | $6.1M | $10.2M | -$4.1M | | GAAP Diluted EPS | $0.40 | $0.66 | -$0.26 | | Core Earnings (Non-GAAP) | $10.8M | $10.5M | +$0.3M | | Core Diluted EPS (Non-GAAP) | $0.70 | $0.68 | +$0.02 | - Net interest margin expanded to 3.23% from 3.17% quarter-over-quarter[7] Strategic Developments & Recognition The company received all regulatory approvals for the acquisition of Guaranty Bancorp, Inc., aiming to strengthen market presence and operational scale, and was recognized by Forbes - Obtained all regulatory approvals to acquire Guaranty Bancorp, Inc., parent company of Woodsville Guaranty Savings Bank, to strengthen presence in key markets, increase operational scale, and expand services[2][7] - Recognized by Forbes Magazine as one of America's 'Best-in-State Banks' for the fourth consecutive year, an honor awarded to less than 5% of all U.S. banks[2][7] Dividend Declaration The Board of Directors declared a cash dividend of $0.32 per share, payable on September 12, 2025, to shareholders of record on August 14, 2025 Dividend Details | Metric | Value | | :------- | :---- | | Dividend Per Share | $0.32 | | Annualized Yield (based on June 30, 2025 closing price) | 4.27% | Financial Condition (Quarter-over-Quarter Analysis) This section analyzes Bar Harbor Bankshares' financial condition, focusing on quarter-over-quarter changes in assets, liabilities, and equity Assets Total assets remained stable at $4.1 billion, primarily due to strategic optimization of wholesale borrowings to fund loan originations, with increases in available-for-sale debt securities and total loans Asset Categories (Millions) | Asset Category | Q2 2025 (Millions) | Q1 2025 (Millions) | Change (QoQ) | | :--------------------------------- | :----------------- | :----------------- | :----------- | | Total Assets | $4,112 | $4,063 | +$49 | | Cash and Cash Equivalents | $87.0 | $88.1 | -$1.1 | | Available-for-Sale Debt Securities | $528.7 | $514.0 | +$14.7 | | Federal Home Loan Bank Stock | $12.7 | $10.7 | +$2.0 | | Total Loans | $3,153 | $3,124 | +$29 | | Allowance for Credit Losses on Loans | $28.9 | $28.6 | +$0.3 | - Total loans increased by 3% annualized growth, driven by a $30.2 million increase in commercial and industrial loans and $5.1 million in commercial real estate[10] - Allowance for credit losses on loans increased by $0.528 million, more than offsetting $0.257 million in net charged-off loans, maintaining a coverage ratio of 0.92% for both quarters[11] Liabilities and Equity Total deposits remained stable but experienced a shift in mix, with money market deposits decreasing and time deposits increasing, while book value and tangible book value per share both saw slight increases Deposit Mix (Millions) | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | | :--------------------------------- | :------ | :------ | :----------- | | Total Deposits | $3.29B | $3.29B | Stable | | Money Market Deposits | -$34.6M | | Decrease | | Time Deposits | +$32M | | Increase | | Non-Interest Bearing Demand Deposits | +$4.7M | | Increase | Per Share Metrics | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | | :-------------------------- | :------ | :------ | :----------- | | Book Value Per Share | $30.60 | $30.51 | +$0.09 | | Tangible Book Value Per Share (Non-GAAP) | $22.58 | $22.47 | +$0.11 | Results of Operations (Year-over-Year Analysis) This section provides a year-over-year analysis of Bar Harbor Bankshares' operational results, including net interest income, non-interest income and expense, and net income Net Interest Income Net interest margin increased year-over-year, driven by growth in loan balances and higher yields on earning assets, while total interest expense decreased due to lower interest-bearing deposit costs Net Interest Performance | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------- | :------ | :------ | :----------- | | Net Interest Margin | 3.23% | 3.09% | +0.14% | | Total Interest & Dividend Income | $48.7M | $46.8M | +3.9% | | Total Interest Expense | $18.8M | $19.1M | -1.5% | - Yield on loans grew 7 basis points to 5.48% in Q2 2025, up from 5.41% in Q2 2024, primarily driven by higher yielding commercial real estate loans[14] - Interest-bearing deposit costs decreased from 2.35% to 2.28% in Q2 2025, despite a 5% increase in deposit balances year-over-year[16] Non-Interest Income and Expense Non-interest income decreased significantly due to impairment losses on available-for-sale debt securities, while non-interest expenses increased, primarily driven by acquisition-related costs and higher salaries and benefits Non-Interest Performance | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :--------------------------------- | :------ | :------ | :----------- | | Provision for Credit Losses on Loans | $0.528M | $0.585M | -$0.057M | | Total Non-Interest Income | $4.6M | $9.5M | -$4.9M | | Total Non-Interest Expenses | $26.5M | $23.8M | +$2.7M | - Non-interest income decreased by $4.8 million, primarily due to $4.9 million in impairment losses on available-for-sale debt securities and other receivables[18] - Non-interest expenses increased by $2.7 million, driven by $1.2 million in acquisition expenses related to Woodsville and a 3% increase in salaries and benefits[19][20] Net Income and Earnings Per Share GAAP net income and diluted EPS decreased year-over-year, largely influenced by impairment losses on securities and increased non-interest expenses, partially offset by lower income tax expense Net Income and EPS | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----------------- | :------ | :------ | :----------- | | Net Income | $6.1M | $10.3M | -$4.2M | | Diluted EPS | $0.40 | $0.67 | -$0.27 | | Income Tax Expense | $1.4M | $2.5M | -$1.1M | | Effective Tax Rate | 19% | 20% | -1% | Company Background This section provides an overview of Bar Harbor Bankshares, its history, and its operational scope Company Overview Bar Harbor Bankshares is the parent company of Bar Harbor Bank & Trust, a community bank founded in 1887, providing full-service community banking across Maine, New Hampshire, and Vermont - Bar Harbor Bankshares (NYSE American: BHB) is the parent company of Bar Harbor Bank & Trust, a community bank founded in 1887[22] - Bar Harbor Bank & Trust serves clients in Maine, New Hampshire, and Vermont[22] Forward-Looking Statements This section addresses the forward-looking nature of certain statements, outlining potential risks and uncertainties that could cause actual results to differ materially Disclaimer and Risk Factors This section outlines the forward-looking nature of certain statements, emphasizing that actual results may differ materially due to various known and unknown risks and uncertainties, and advises against undue reliance on these statements - Statements regarding future activities, events, or developments are 'forward-looking statements' subject to risks and uncertainties[23] - Key risk factors include changes in economic conditions, consumer behavior, asset quality, liquidity needs, competition, interest rates, loan demand, operational risks (e.g., cybersecurity), strategic growth execution (including acquisitions), regulatory changes, and market value fluctuations[23] - The company disclaims any obligation to update or revise any forward-looking statement[23] Non-GAAP Financial Measures This section explains the use of non-GAAP financial measures, such as core earnings and tangible book value, providing supplemental perspectives on operating results and financial condition Explanation and Reconciliation This section clarifies the use of non-GAAP financial measures, such as core earnings and tangible book value, which are provided to offer supplemental perspectives on operating results and financial condition, emphasizing they are not substitutes for GAAP - Non-GAAP measures (e.g., core earnings, core EPS, tangible book value) are used to provide supplemental perspectives on operating results and financial condition[24][25][26] - Core earnings exclude items unrelated to normalized operations, such as gains/losses on securities, acquisition costs, and restructuring costs, presented net of income tax expense[25] - Non-GAAP measures are not a substitute for GAAP measures and may not be comparable to similarly titled measures from other companies[24] Consolidated Financial Schedules (Unaudited) This section presents unaudited consolidated financial schedules, including selected financial highlights, balance sheets, loan and deposit analyses, statements of income, average yields and costs, average balances, asset quality analysis, and reconciliation of non-GAAP financial measures Selected Financial Highlights This table summarizes key financial performance indicators and balance sheet data for Bar Harbor Bankshares across five quarters, including per share data, performance ratios, and financial data in millions Selected Financial Highlights | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :------------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Net earnings, diluted | $0.40 | $0.66 | $0.72 | $0.80 | $0.67 | | Core earnings, diluted (Non-GAAP) | $0.70 | $0.68 | $0.72 | $0.80 | $0.66 | | Total book value | $30.60 | $30.51 | $30.00 | $30.12 | $28.81 | | Tangible book value (Non-GAAP) | $22.58 | $22.47 | $21.93 | $22.02 | $20.68 | | Dividends | $0.32 | $0.30 | $0.30 | $0.30 | $0.30 | | Return on assets | 0.60 % | 1.02 % | 1.09 % | 1.20 % | 1.04 % | | Net interest margin, fully taxable equivalent (Non-GAAP) | 3.23 % | 3.17 % | 3.17 % | 3.15 % | 3.09 % | | Total assets (Millions) | $4,112 | $4,063 | $4,083 | $4,030 | $4,034 | | Total loans (Millions) | $3,153 | $3,124 | $3,147 | $3,082 | $3,064 | | Total deposits (Millions) | $3,292 | $3,297 | $3,268 | $3,261 | $3,140 | Balance Sheets This table presents the consolidated balance sheets, detailing assets, liabilities, and shareholders' equity for Bar Harbor Bankshares across five quarters Consolidated Balance Sheets (in thousands) | (in thousands) | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :--------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Total assets | $4,112,005 | $4,063,226 | $4,083,327 | $4,029,927 | $4,034,200 | | Total loans | $3,152,664 | $3,124,240 | $3,147,096 | $3,081,735 | $3,064,181 | | Total deposits | $3,291,988 | $3,296,811 | $3,267,688 | $3,261,086 | $3,140,466 | | Total shareholders' equity | $468,860 | $467,311 | $458,428 | $459,916 | $438,907 | Loan and Deposit Analysis These tables provide a detailed breakdown of the company's loan portfolio by segment and deposit mix, including annualized growth rates for both quarter-to-date and year-to-date periods Loan Analysis (in thousands) | Loan Type | Jun 30, 2025 | Mar 31, 2025 | QTD Growth % (Annualized) | YTD Growth % (Annualized) | | :---------------------- | :----------- | :----------- | :------------------------ | :------------------------ | | Commercial real estate | $1,767,206 | $1,762,132 | 1 % | 3 % | | Commercial and industrial | $400,908 | $370,683 | 33 % | 6 % | | Total commercial loans | $2,168,114 | $2,132,815 | 7 % | 4 % | | Residential real estate | $796,184 | $807,514 | (6)% | (8)% | | Consumer | $111,036 | $105,404 | 21 % | 14 % | | Total loans | $3,152,664 | $3,124,240 | 4 % | — % | Deposit Analysis (in thousands) | Deposit Type | Jun 30, 2025 | Mar 31, 2025 | QTD Growth % (Annualized) | YTD Growth % (Annualized) | | :------------------------ | :----------- | :----------- | :------------------------ | :------------------------ | | Non-interest bearing demand | $552,074 | $547,401 | 3 % | (8)% | | Interest-bearing demand | $931,854 | $930,031 | 1 % | 5 % | | Savings | $542,579 | $551,280 | (6)% | (1)% | | Money market | $370,709 | $405,326 | (34)% | (17)% | | Time | $894,772 | $862,773 | 15 % | 16 % | | Total deposits | $3,291,988 | $3,296,811 | (1)% | 1 % | Statements of Income These tables present the consolidated statements of income, showing revenues, expenses, and net income for both three-month and six-month periods ended June 30, 2025, compared to the prior year, as well as a five-quarter trend Three Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Total interest and dividend income | $48,688 | $46,838 | | Total interest expense | $18,793 | $19,079 | | Net interest income | $29,895 | $27,759 | | Total non-interest income | $4,646 | $9,457 | | Total non-interest expense | $26,538 | $23,842 | | Net income | $6,092 | $10,257 | | Diluted EPS | $0.40 | $0.67 | Six Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Total interest and dividend income | $96,226 | $92,661 | | Total interest expense | $37,324 | $36,847 | | Net interest income | $58,902 | $55,814 | | Total non-interest income | $13,564 | $17,843 | | Total non-interest expense | $51,189 | $47,330 | | Net income | $16,303 | $20,352 | | Diluted EPS | $1.06 | $1.33 | Net Income (in thousands, 5 Quarter Trend) | Quarter Ended | Net Income | | :------------ | :--------- | | Jun 30, 2025 | $6,092 | | Mar 31, 2025 | $10,211 | | Dec 31, 2024 | $10,999 | | Sep 30, 2024 | $12,193 | | Jun 30, 2024 | $10,257 | Average Yields and Costs This table provides annualized average yields on earning assets and costs on funding liabilities, presented on a fully taxable equivalent basis, across five quarters Average Yields and Costs | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :------------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Total earning assets yield | 5.23 % | 5.16 % | 5.14 % | 5.24 % | 5.18 % | | Total loans yield | 5.48 % | 5.42 % | 5.40 % | 5.49 % | 5.41 % | | Total interest-bearing deposits cost | 2.28 % | 2.31 % | 2.41 % | 2.45 % | 2.35 % | | Total interest-bearing liabilities cost | 2.51 % | 2.52 % | 2.54 % | 2.66 % | 2.64 % | | Net interest margin, fully taxable equivalent | 3.23 % | 3.17 % | 3.17 % | 3.15 % | 3.09 % | Average Balances This table details the average balances of assets, liabilities, and shareholders' equity for Bar Harbor Bankshares over five quarters Average Balances (in thousands) | (in thousands) | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :------------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Total earning assets | $3,776,937 | $3,781,402 | $3,720,560 | $3,728,024 | $3,665,274 | | Total loans | $3,150,028 | $3,153,902 | $3,098,082 | $3,071,638 | $3,031,088 | | Total interest-bearing deposits | $2,727,386 | $2,718,174 | $2,678,942 | $2,621,842 | $2,533,270 | | Total liabilities | $3,601,372 | $3,610,853 | $3,559,482 | $3,572,892 | $3,523,551 | | Total shareholders' equity | $469,242 | $466,150 | $459,706 | $454,149 | $436,198 | Asset Quality Analysis This table provides an analysis of asset quality, including non-performing assets, provision and allowance for credit losses on loans, and net loan charge-offs/recoveries across five quarters Asset Quality Analysis (in thousands) | (in thousands) | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :------------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Total non-performing assets | $12,135 | $13,046 | $12,754 | $7,100 | $6,277 | | Total non-accruing loans/total loans | 0.31 % | 0.26 % | 0.22 % | 0.23 % | 0.20 % | | Allowance for credit losses on loans/total loans | 0.92 % | 0.92 % | 0.91 % | 0.94 % | 0.94 % | | Net charge-offs (recoveries) (QTD annualized)/average loans | 0.03 % | 0.01 % | 0.02 % | 0.01 % | 0.01 % | Reconciliation of Non-GAAP Financial Measures These tables provide a detailed reconciliation of non-GAAP financial measures to their most directly comparable GAAP measures, including core earnings, core revenue, core non-interest expense, and various performance ratios, along with supplementary data Reconciliation of Non-GAAP Financial Measures (in thousands) | (in thousands) | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :------------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Net income (GAAP) | $6,092 | $10,211 | $10,999 | $12,193 | $10,257 | | Total non-core items | $4,658 | $249 | $54 | $0 | -$227 | | Core earnings (Non-GAAP) | $10,750 | $10,460 | $11,053 | $12,193 | $10,030 | | Core earnings per share, diluted (Non-GAAP) | $0.70 | $0.68 | $0.72 | $0.80 | $0.66 | | Tangible book value per share, period end (Non-GAAP) | $22.58 | $22.47 | $21.93 | $22.02 | $20.68 | | Core return on assets (Non-GAAP) | 1.06 % | 1.04 % | 1.09 % | 1.20 % | 1.02 % | | Efficiency ratio (Non-GAAP) | 62.10 % | 62.00 % | 59.84 % | 62.09 % | 62.78 % |