Bar Harbor Bankshares(BHB) - 2025 Q3 - Quarterly Results

Third Quarter 2025 Overview Bar Harbor Bankshares reported strong Q3 2025 financial performance, completed the Woodsville acquisition, and declared a cash dividend Q3 2025 Performance Summary Bar Harbor Bankshares reported strong Q3 2025 GAAP net income of $8.9 million ($0.54 diluted EPS) and core earnings of $15.4 million ($0.95 diluted EPS), significantly up from Q2 2025 Q3 2025 Financial Performance (vs Q2 2025) | Metric | Q3 2025 | Q2 2025 | | :-------------------------- | :------ | :------ | | GAAP Net Income | $8.9 million | $6.1 million | | GAAP Diluted EPS | $0.54 | $0.40 | | Core Earnings (Non-GAAP) | $15.4 million | $10.8 million | | Core Diluted EPS (Non-GAAP) | $0.95 | $0.70 | - Net interest margin expanded to 3.56% from 3.23% (QoQ)[7] - Efficiency ratio improved to 56.70% compared to 62.10% in the prior quarter[7] - Annualized quarter-to-date deposit growth was 16%[7] - Non-accruing loans to total loans declined to 0.27% from 0.31%[7] Acquisition of Guaranty Bancorp, Inc. The company completed the acquisition of Woodsville on August 1, 2025, integrating its systems and branches by mid-October, adding significant assets, loans, and deposits to the balance sheet - Acquisition of Guaranty Bancorp, Inc. (Woodsville) completed on August 1, 2025, with customer integration in mid-October 2025[4][7] Acquisition Impact on Balance Sheet | Item | Amount (in millions) | | :-------------------------------- | :------------------- | | Total Assets Added | $658.1 | | Loans Added | $413.4 | | Deposits Added | $531.3 | | Borrowings and Subordinated Debt Added | $109.2 | | Goodwill Recorded | $22.3 | | Core Deposit Intangibles Recorded | $14.0 | Allowance for Credit Losses (ACL) from Acquisition | Item | Amount (in millions) | | :-------------------------------- | :------------------- | | Initial ACL | $5.6 | | ACL for Purchased Credit Deteriorated (PCD) Loans | $1.6 | | ACL for Non-PCD Loans (through provision expense) | $4.0 | | Total CECL Reserve (acquired portfolio, as of Sep 30, 2025) | $4.6 | Dividend Declared The Board of Directors declared a cash dividend of $0.32 per share, representing a 4.20% annualized yield Dividend Declaration Details | Item | Value | | :-------------------- | :---- | | Dividend per share | $0.32 | | Record Date | November 20, 2025 | | Payable Date | December 19, 2025 | | Annualized Yield (based on Sep 30, 2025 price) | 4.20% | Financial Condition (Q3 2025 vs Q2 2025) The company's Q3 2025 financial condition improved with significant balance sheet growth from the Woodsville acquisition Balance Sheet Overview Total assets increased by $610 million (15%) to $4.7 billion at the end of Q3 2025, primarily driven by the Woodsville acquisition - Total assets increased $610 million or 15% to $4.7 billion at the end of Q3 2025, primarily due to the acquisition of Woodsville[8] - The Company strategically optimized deposits and cash to pay down wholesale borrowings while onboarding deposits from Woodsville[8] Assets Analysis Cash, debt securities, and total loans increased significantly, largely due to the Woodsville acquisition, while commercial loans showed strong organic growth Key Asset Changes (Q3 2025 vs Q2 2025) | Asset Category | Q3 2025 (in millions) | Q2 2025 (in millions) | Change (in millions) | Primary Driver | | :---------------------------------- | :-------------------- | :-------------------- | :------------------- | :------------- | | Total cash and cash equivalents | $141.3 | $87.0 | +$54.3 | Woodsville acquisition | | Available-for-sale debt securities | $597.8 | $528.7 | +$69.1 | Acquired securities ($115.6M) | | Federal Home Loan Bank ("FHLB") stock | $8.6 | $12.7 | -$4.1 | Pay down FHLB advances | | Total loans | $3,600 | $3,200 | +$400 | Woodsville acquisition ($413.4M) | | Allowance for credit losses on loans | $33.9 | $28.9 | +$5.1 | Woodsville acquisition reserves | | Premises and equipment | $58.8 | $52.6 | +$6.2 | Acquired assets ($6.6M) | | Goodwill | $141.8 | $119.5 | +$22.3 | Woodsville acquisition | | Other intangible assets | $17.0 | $3.5 | +$13.5 | Core deposit intangible | | Cash surrender value of BOLI | $95.6 | $83.1 | +$12.5 | Acquired BOLI ($11.8M) | - Commercial loans saw $34.8 million in organic growth, equating to an annualized growth rate of 5%[12] - The allowance for credit losses to total loans coverage ratio increased to 0.95% from 0.92% (QoQ)[13] Liabilities Analysis Total deposits grew substantially from the Woodsville acquisition and organic growth, while senior borrowings decreased due to strategic paydowns Key Liability Changes (Q3 2025 vs Q2 2025) | Liability Category | Q3 2025 (in millions) | Q2 2025 (in millions) | Change (in millions) | Primary Driver | | :---------------------------------- | :-------------------- | :-------------------- | :------------------- | :------------- | | Total deposits | $4,000 | $3,292 | +$708 | Woodsville acquisition ($531.3M) + organic growth | | Senior borrowings | $140.0 | $256.5 | -$116.5 | Strategic paydowns | | Subordinated debt | $52.2 | $40.6 | +$11.6 | Woodsville acquisition ($11.2M) | - Total deposits grew by 16% annualized quarter-to-date organically, driven primarily by non-interest bearing demand and money market accounts[17] - The company paid down $201 million of its senior borrowings within the quarter[18] Shareholders' Equity and Book Value Book value per share increased to $31.22, while tangible book value per share decreased to $21.70 due to new intangible assets Book Value per Share (Q3 2025 vs Q2 2025) | Metric | Q3 2025 | Q2 2025 | | :-------------------------- | :------ | :------ | | Book value per share | $31.22 | $30.60 | | Tangible book value per share (Non-GAAP) | $21.70 | $22.58 | Results of Operations (Q3 2025 vs Q3 2024) Q3 2025 operations showed net interest margin expansion and non-interest income growth, despite increased expenses and taxes Net Interest Income and Margin Net interest margin expanded to 3.56% in Q3 2025, driven by increased interest income from loans and lower borrowing costs - Net interest margin increased to 3.56% in Q3 2025 compared to 3.15% in Q3 2024[20] Interest Income and Expense Changes (Q3 2025 vs Q3 2024) | Item | Q3 2025 (in millions) | Q3 2024 (in millions) | Change (in millions) | | :---------------------------------- | :-------------------- | :-------------------- | :------------------- | | Total interest and dividend income | $55.9 | $48.6 | +$7.3 (15.1% increase) | | Loan income | +$6.4 | - | - | | Total interest expense | $19.0 | $19.6 | -$0.7 (3.3% decrease) | | Deposit costs | +$0.2 | - | - | | Borrowing costs | -$0.9 | - | - | - Yields on earning assets grew to 5.36% compared to 5.24% in Q3 2024[21] - Borrowing costs decreased $904 thousand or 26.2% due to paydowns and lower borrowing rates (4.04% in Q3 2025 vs 4.38% in Q3 2024)[22] Non-Interest Income Non-interest income increased by $914 thousand, primarily due to higher customer service fees and derivative income from the acquisition Non-Interest Income Changes (Q3 2025 vs Q3 2024) | Item | Q3 2025 (in millions) | Q3 2024 (in millions) | Change (in millions) | | :---------------------------------- | :-------------------- | :-------------------- | :------------------- | | Total non-interest income | $10.6 | $9.7 | +$0.9 (9.5% increase) | | Customer service fees | +$0.5 | - | - | | Customer Derivative income | +$0.7 | - | - | | Trust management fee income | -$0.2 | - | - | Non-Interest Expenses Non-interest expenses rose by $8.0 million, largely due to acquisition-related costs and increased salaries and benefits Non-Interest Expense Changes (Q3 2025 vs Q3 2024) | Item | Q3 2025 (in millions) | Q3 2024 (in millions) | Change (in millions) | | :---------------------------------- | :-------------------- | :-------------------- | :------------------- | | Total non-interest expenses | $32.7 | $24.8 | +$8.0 (32.3% increase) | | Acquisition expenses | +$4.9 | - | - | | Salaries and benefits | +$1.6 | - | - | | Occupancy and equipment | +$0.5 | - | - | | Amortization of intangibles | +$0.2 | - | - | | Other expenses | +$0.5 | - | - | - Salaries and benefits increased due to cost-of-living adjustments, additional salary associated with retained Woodsville personnel, and employee insurance costs[25] Income Tax Expense Income tax expense increased to $2.2 million, with the GAAP effective tax rate rising to 20% due to prior year adjustments Income Tax Expense (Q3 2025 vs Q3 2024) | Item | Q3 2025 (in millions) | Q3 2024 (in millions) | | :-------------------- | :-------------------- | :-------------------- | | Income tax expense | $2.2 | $1.4 | | GAAP effective tax rate | 20% | 10% | | Core effective tax rate (Non-GAAP) | 22% | 20% | - The increase in taxes and tax rate is driven by a prior year one-time multiple year tax refund on tax exempt loan income and a state apportionment adjustment[26] Additional Information This section covers company background, forward-looking statement disclaimers, and explanations of non-GAAP financial measures Company Background Bar Harbor Bankshares is the parent company of Bar Harbor Bank & Trust, a community bank serving Maine, New Hampshire, and Vermont - Bar Harbor Bankshares is the parent company of Bar Harbor Bank & Trust, a community bank founded in 1887[27] - Bar Harbor Bank & Trust serves clients in Maine, New Hampshire, and Vermont[27] Forward-Looking Statements The report contains forward-looking statements subject to various risks and uncertainties, with no obligation for the company to update them - All statements regarding future activities, events, or developments are considered 'forward-looking statements' and are subject to risks, uncertainties, and other factors[28][29] - Potential risks include changes in business and economic conditions, consumer behavior, asset quality decline, liquidity needs, competition, interest rate increases, operational risks (e.g., cybersecurity, natural disasters), regulatory changes, and the ability to execute strategic plans[30] - The Company disclaims any obligation to update or revise any forward-looking statement[30] Non-GAAP Financial Measures Explanation The company utilizes non-GAAP financial measures like core earnings and tangible book value to offer supplemental insights into performance - Non-GAAP financial measures provide supplemental perspectives on operating results, performance trends, and financial condition, but are not substitutes for GAAP measures[32] - Core earnings exclude amounts viewed as unrelated to normalized operations, such as gains/losses on securities, acquisition costs, restructuring costs, and legal settlements[33] - Management believes non-GAAP measures facilitate understanding operating trends and comparison to other companies in the financial services industry[34] Consolidated Financial Schedules (Unaudited) This section presents unaudited consolidated financial schedules, detailing financial highlights, balance sheets, income, and asset quality Selected Financial Highlights This table provides a five-quarter overview of key financial metrics, including per share data, performance ratios, and financial data Selected Financial Highlights (Q3 2025 vs Q2 2025 vs Q3 2024) | Metric | Sept 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :--------------------------------- | :------------ | :----------- | :----------- | | PER SHARE DATA | | | | | Net earnings, diluted | $0.54 | $0.40 | $0.80 | | Core earnings, diluted (Non-GAAP) | $0.95 | $0.70 | $0.80 | | Total book value | $31.22 | $30.60 | $30.12 | | Tangible book value (Non-GAAP) | $21.70 | $22.58 | $22.02 | | Dividends | $0.32 | $0.32 | $0.30 | | PERFORMANCE RATIOS | | | | | Return on assets | 0.78 % | 0.60 % | 1.20 % | | Core return on assets (Non-GAAP) | 1.35 % | 1.06 % | 1.20 % | | Net interest margin, fully taxable equivalent (Non-GAAP) | 3.56 % | 3.23 % | 3.15 % | | Efficiency ratio (Non-GAAP) | 56.70 % | 62.10 % | 62.09 % | | FINANCIAL DATA (In millions) | | | | | Total assets | $4,722 | $4,112 | $4,030 | | Total loans | $3,584 | $3,153 | $3,082 | | Total deposits | $3,953 | $3,292 | $3,261 | | Net income | $9 | $6 | $12 | | Core earnings (Non-GAAP) | $15 | $11 | $12 | | ASSET QUALITY AND CONDITION RATIOS | | | | | Allowance for credit losses on loans/total loans | 0.95 % | 0.92 % | 0.94 % | | Total non-accruing loans/total loans | 0.27 % | 0.31 % | 0.23 % | Consolidated Balance Sheets This table presents the consolidated balance sheet for five quarters, detailing assets, liabilities, and shareholders' equity Consolidated Balance Sheets (Selected Items, in thousands) | Item | Sept 30, 2025 (in thousands) | Jun 30, 2025 (in thousands) | Mar 31, 2025 (in thousands) | Dec 31, 2024 (in thousands) | Sep 30, 2024 (in thousands) | | :---------------------------------- | :------------ | :----------- | :----------- | :----------- | :----------- | | Total cash and cash equivalents | $141,291 | $87,035 | $88,131 | $72,162 | $81,220 | | Net available-for-sale debt securities | $597,810 | $528,690 | $512,757 | $520,450 | $535,892 | | Net loans | $3,549,776 | $3,123,779 | $3,095,626 | $3,118,352 | $3,052,712 | | Goodwill | $141,819 | $119,477 | $119,477 | $119,477 | $119,477 | | Other intangible assets | $16,989 | $3,472 | $3,705 | $3,938 | $4,171 | | Total assets | $4,721,829 | $4,112,005 | $4,063,226 | $4,083,327 | $4,029,927 | | Total deposits | $3,952,773 | $3,291,988 | $3,296,811 | $3,267,688 | $3,261,086 | | Senior borrowings | $139,956 | $256,441 | $199,982 | $249,981 | $186,207 | | Subordinated borrowings | $52,229 | $40,620 | $40,620 | $40,620 | $60,580 | | Total shareholders' equity | $520,955 | $468,860 | $467,311 | $458,428 | $459,916 | Loan and Deposit Analysis This table breaks down the composition and growth of the loan and deposit portfolios, highlighting acquired and organic balances Loan Analysis (in thousands) | Loan Type | Sept 30, 2025 (in thousands) | Acquired WGSB Balances (1) (in thousands) | Jun 30, 2025 (in thousands) | Organic Annualized Growth % (Quarter to Date) | | :---------------------- | :------------ | :------------------------- | :----------- | :-------------------------------------------- | | Commercial real estate | $1,942,659 | $117,832 | $1,767,206 | 13 % | | Commercial and industrial | $405,759 | $25,651 | $400,908 | (21) % | | Total commercial loans | $2,348,418 | $143,483 | $2,168,114 | 7 % | | Residential real estate | $1,025,266 | $248,484 | $796,184 | (10) % | | Consumer | $126,345 | $16,215 | $111,036 | (3) % | | Tax exempt and other | $83,687 | $5,226 | $77,330 | 6 % | | Total loans | $3,583,716 | $413,408 | $3,152,664 | 2 % | Deposit Analysis (in thousands) | Deposit Type | Sept 30, 2025 (in thousands) | Acquired WGSB Balances (1) (in thousands) | Jun 30, 2025 (in thousands) | Organic Annualized Growth % (Quarter to Date) | | :---------------------- | :------------ | :------------------------- | :----------- | :-------------------------------------------- | | Non-interest bearing demand | $697,357 | $89,274 | $552,074 | 41 % | | Interest bearing demand | $1,137,362 | $185,802 | $931,854 | 8 % | | Savings | $647,428 | $104,792 | $542,579 | — % | | Money market | $488,633 | $52,470 | $370,709 | 71 % | | Total non-maturity deposits | $2,970,780 | $432,338 | $2,397,216 | 24 % | | Time | $981,993 | $98,951 | $894,772 | (5) % | | Total deposits | $3,952,773 | $531,289 | $3,291,988 | 16 % | Consolidated Statements of Income This table provides the consolidated statements of income for the three and nine months ended September 30, 2025, and 2024 Consolidated Statements of Income (Three Months Ended September 30, in thousands) | Item | 2025 (in thousands) | 2024 (in thousands) | Change (2025 vs 2024) (in thousands) | | :---------------------------------- | :----- | :----- | :-------------------- | | Total interest and dividend income | $55,922 | $48,580 | +$7,342 | | Total interest expense | $18,963 | $19,622 | -$659 | | Net interest income | $36,959 | $28,958 | +$8,001 | | Provision for credit losses on loans | $3,749 | $228 | +$3,521 | | Total non-interest income | $10,567 | $9,653 | +$914 | | Total non-interest expense | $32,739 | $24,772 | +$7,967 | | Income before income taxes | $11,038 | $13,611 | -$2,573 | | Income tax expense | $2,183 | $1,418 | +$765 | | Net income | $8,855 | $12,193 | -$3,338 | | Diluted EPS | $0.54 | $0.80 | -$0.26 | Consolidated Statements of Income (Five Quarter Trend) This table presents the consolidated statements of income across five quarters, offering a detailed view of financial performance Consolidated Statements of Income (Selected Items, in thousands) | Item | Sept 30, 2025 (in thousands) | Jun 30, 2025 (in thousands) | Mar 31, 2025 (in thousands) | Dec 31, 2024 (in thousands) | Sep 30, 2024 (in thousands) | | :---------------------------------- | :------------ | :----------- | :----------- | :----------- | :----------- | | Total interest and dividend income | $55,922 | $48,688 | $47,538 | $47,483 | $48,580 | | Total interest expense | $18,963 | $18,793 | $18,531 | $18,416 | $19,622 | | Net interest income | $36,959 | $29,895 | $29,007 | $29,067 | $28,958 | | Provision for credit losses on loans | $3,749 | $528 | -$57 | -$147 | $228 | | Total non-interest income | $10,567 | $4,646 | $8,918 | $9,392 | $9,653 | | Total non-interest expense | $32,739 | $26,538 | $24,651 | $23,885 | $24,772 | | Net income | $8,855 | $6,092 | $10,211 | $10,999 | $12,193 | | Diluted EPS | $0.54 | $0.40 | $0.66 | $0.72 | $0.80 | Average Yields and Costs (Fully Taxable Equivalent) This table details the annualized average yields on earning assets and costs on funding liabilities for five quarters Average Yields and Costs (Selected Items, Annualized) | Item | Sept 30, 2025 (%) | Jun 30, 2025 (%) | Mar 31, 2025 (%) | Dec 31, 2024 (%) | Sep 30, 2024 (%) | | :---------------------------------- | :------------ | :----------- | :----------- | :----------- | :----------- | | Earning assets | | | | | | | Interest-earning deposits with other banks | 4.49 % | 4.68 % | 4.55 % | 4.92 % | 5.54 % | | Available-for-sale debt securities | 4.14 % | 3.86 % | 3.80 % | 3.69 % | 3.86 % | | Federal Home Loan Bank stock | 7.71 % | 7.20 % | 4.78 % | 12.07 % | 10.10 % | | Total loans | 5.60 % | 5.48 % | 5.42 % | 5.40 % | 5.49 % | | Total earning assets | 5.36 % | 5.23 % | 5.16 % | 5.14 % | 5.24 % | | Funding liabilities | | | | | | | Total interest-bearing deposits | 2.12 % | 2.28 % | 2.31 % | 2.41 % | 2.45 % | | Borrowings | 4.04 % | 4.85 % | 4.61 % | 4.20 % | 4.38 % | | Total interest-bearing liabilities | 2.27 % | 2.51 % | 2.52 % | 2.54 % | 2.66 % | | Net interest spread | 3.09 % | 2.72 % | 2.64 % | 2.60 % | 2.58 % | | Net interest margin, fully taxable equivalent (Non-GAAP) | 3.56 % | 3.23 % | 3.17 % | 3.17 % | 3.15 % | Average Balances This table presents the average balances for assets, liabilities, and shareholders' equity over five quarters Average Balances (Selected Items, in thousands) | Item | Sept 30, 2025 (in thousands) | Jun 30, 2025 (in thousands) | Mar 31, 2025 (in thousands) | Dec 31, 2024 (in thousands) | Sep 30, 2024 (in thousands) | | :---------------------------------- | :------------ | :----------- | :----------- | :----------- | :----------- | | Total earning assets | $4,179,348 | $3,776,937 | $3,781,402 | $3,720,560 | $3,728,024 | | Total assets | $4,518,079 | $4,070,614 | $4,077,003 | $4,019,188 | $4,027,041 | | Total loans | $3,454,899 | $3,150,028 | $3,153,902 | $3,098,082 | $3,071,638 | | Total interest-bearing deposits | $3,070,534 | $2,727,386 | $2,718,174 | $2,678,942 | $2,621,842 | | Borrowings | $250,110 | $271,410 | $265,780 | $208,990 | $312,891 | | Total liabilities | $4,018,639 | $3,601,372 | $3,610,853 | $3,559,482 | $3,572,892 | | Total shareholders' equity | $499,440 | $469,242 | $466,150 | $459,706 | $454,149 | Asset Quality Analysis This table provides a detailed analysis of asset quality, including non-performing assets, provision for credit losses, and net loan charge-offs Asset Quality Analysis (Selected Items, in thousands) | Item | Sept 30, 2025 (in thousands) | Jun 30, 2025 (in thousands) | Mar 31, 2025 (in thousands) | Dec 31, 2024 (in thousands) | Sep 30, 2024 (in thousands) | | :---------------------------------- | :------------ | :----------- | :----------- | :----------- | :----------- | | NON-PERFORMING ASSETS | | | | | | | Total non-accruing loans | $9,510 | $9,732 | $8,086 | $6,994 | $7,100 | | Total non-performing assets | $11,913 | $12,135 | $13,046 | $12,754 | $7,100 | | Total non-accruing loans/total loans | 0.27 % | 0.31 % | 0.26 % | 0.22 % | 0.23 % | | Total non-performing assets/total assets | 0.25 % | 0.30 % | 0.32 % | 0.31 % | 0.18 % | | PROVISION AND ALLOWANCE FOR CREDIT LOSSES ON LOANS | | | | | | | Balance at beginning of period | $28,885 | $28,614 | $28,744 | $29,023 | $28,855 | | ACL established on PCD loans | $1,622 | — | — | — | — | | Provision for credit losses on loans | $3,749 | $528 | -$57 | -$147 | $228 | | Balance at end of period | $33,940 | $28,885 | $28,614 | $28,744 | $29,023 | | Allowance for credit losses/total loans | 0.95 % | 0.92 % | 0.92 % | 0.91 % | 0.94 % | | NET LOAN (CHARGE-OFFS) RECOVERIES | | | | | | | Total, net | -$316 | -$257 | -$73 | -$132 | -$60 | | Net charge-offs (recoveries) (QTD annualized)/average loans | 0.04 % | 0.03 % | 0.01 % | 0.02 % | 0.01 % | Reconciliation of Non-GAAP Financial Measures and Supplementary Data This table offers a detailed reconciliation of non-GAAP financial measures to their GAAP equivalents, along with supplementary data Reconciliation of Non-GAAP Financial Measures (Selected Items, in thousands) | Item | Sept 30, 2025 (in thousands) | Jun 30, 2025 (in thousands) | Mar 31, 2025 (in thousands) | Dec 31, 2024 (in thousands) | Sep 30, 2024 (in thousands) | | :---------------------------------- | :------------ | :----------- | :----------- | :----------- | :----------- | | Net income (GAAP) | $8,855 | $6,092 | $10,211 | $10,999 | $12,193 | | Total non-core items | $6,544 | $4,658 | $249 | $54 | — | | Core earnings (Non-GAAP) | $15,399 | $10,750 | $10,460 | $11,053 | $12,193 | | Total revenue (GAAP) | $47,526 | $34,541 | $37,925 | $38,459 | $38,611 | | Total core revenue (Non-GAAP) | $47,485 | $39,483 | $37,925 | $38,459 | $38,611 | | Total non-interest expense (GAAP) | $32,739 | $26,538 | $24,651 | $23,885 | $24,772 | | Core non-interest expense (Non-GAAP) | $27,967 | $25,330 | $24,322 | $23,814 | $24,772 | | Core earnings per share, diluted (Non-GAAP) | $0.95 | $0.70 | $0.68 | $0.72 | $0.80 | | Tangible book value per share, period end (Non-GAAP) | $21.70 | $22.58 | $22.47 | $21.93 | $22.02 | | Core return on assets (Non-GAAP) | 1.35 % | 1.06 % | 1.04 % | 1.09 % | 1.20 % | | Core return on equity (Non-GAAP) | 12.23 % | 9.19 % | 9.09 % | 9.57 % | 10.68 % | | Efficiency ratio (Non-GAAP) | 56.70 % | 62.10 % | 62.00 % | 59.84 % | 62.09 % |