Bar Harbor Bankshares reports Q2 earnings increase driven by higher fee income
File photo / Tim Greenway
Curtis Simard, president and CEO of Bar Harbor Bankshares
Bar Harbor Bankshares (NYSE American: BHB), the parent company of Bar Harbor Bank & Trust, reported second-quarter net income of $9 million, or 60 cents a share, representing a 9% increase in earnings per share over a year ago.
Bar Harbor Bank was the third-largest Maine-based bank in a Mainebiz ranking published in April, trailing Bangor Savings Bank, at No. 1, and Camden National Bank, No. 2, based on assets at the end of last year.
Core, non-GAAP earnings at Bar Harbor Bankshares amounted to $9.4 million, or 63 cents per share, in the second quarter of 2021, up from $8.6 million, or 56 cents per share, a year earlier.
The company also reported a 14% annualized increase in core deposits and 8% annualized total commercial loan growth, excluding loans made under the federal Paycheck Protection Program.
“We had another quarter of double-digit core earnings growth and core return on assets of over 1.00%," Curtis Simard, the bank's president and CEO, said in a news release dated July 21. "Profitability increased on higher fee income driven from growth in core deposits and assets under management."
Simard said that customer service levels returned to pre-pandemic levels and that the bank's wealth management business continues to be a significant contributor to total non-interest income, while the bank's retail and commercial loan teams continue to generate new core deposit accounts, particularly checking accounts.
Bar Harbor Bank opened branches in Brunswick last fall and in Bedford, N.H., in January, and a spokesman told Mainebiz on Monday that both branches are "doing quite well."
Asked about plans for additional branches, he added, "We are always evaluating new branch opportunities, but do not have any currently planned."
1,000 new banking relationships
In the company's earnings release, Simard noted that more than 1,000 new banking relationships were created in the quarter, highlighting both existing customer retention efforts and new customer initiatives.
"With the increase in mortgage rates late in the first quarter, we chose to opportunistically add balances to the balance sheet which helped stem the attrition," he added. "However, a focus on IRR [internal rate of return] management remains top of mind.”
Total assets were $3.6 billion at the end of the second quarter as the company leveraged excess cash liquidity to reduce maturing brokered deposits of $104.7 million during the quarter.
Loans decreased $35.5 million during the quarter, or 6% on an annualized basis, which the bank said was primarily due to PPP loan forgiveness and prepayments on residential loans.
Some 76 commercial relationships were developed in the quarter, leading to 6% growth in commercial real estate loans on an annualized basis and 13% growth in commercial and industrial loans on an annualized basis, excluding PPP loans.
Cash dividend declared
The company's board of directors voted to declare a cash dividend of 24 cents per share to shareholders of record at the close of business on Aug. 17, payable on Sept. 17.
The dividend equates to a 3.35% annualized yield based on the $28.62 closing price of the company's common stock at the end of the second quarter.
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