File photo / Tim Greenway
Curtis Simard, president and CEO of Bar Harbor Bankshares, said the company reduced funding costs, increased fee-based revenue and grew commercial loans.
October 29, 2020
Bar Harbor Bankshares reports Q3 net income up 68%
By Staff
Bar Harbor Bankshares (NYSE American: BHB), the Bar Harbor-based parent company of Bar Harbor Bank & Trust, reported a strong third-quarter financial performance, with net income increasing 68% to $8.4 million, compared to $5 million in the same quarter of 2019.
The company expanded on all key performance metrics on a year-over-year and linked quarter basis, the bank’s president and CEO, Curtis Simard, said in a news release.
“We continue to see an upswing in customer activity since our state economies reopened this past summer on a limited basis and a further rebound in branch operations compared to the first half of the year,” he said.
“Given the current economic environment, we have selectively grown commercial loans by 14% for the quarter, excluding PPP loans, and pushed much of the mortgage production through our secondary market platform.”
The bank saw high demand in the mortgage markets for new and refinanced loans, resulting in over four times the gains compared to the third quarter of 2019.
Simard continued, “One of our greatest strengths is the diversity in capabilities surrounding fee income. Our wealth management business is a significant contributor to fee income, as well as a keystone for deepening customer relationships."
The bank is bringing its wealth management companies and its brokerage teams under one name, Bar Harbor Wealth Management, he added.
The company experienced a significant decrease in loans under COVID-related forbearance since the second quarter. As of Sept. 30, total outstanding deferrals, which primarily consist of interest-only forbearance, were $78.7 million or 3% of total loans, with consumer mortgages representing $4.6 million of the total or less than half a percent of the consumer portfolio.
“Our third-quarter stress-testing resulted in no significant risk-rating downgrades or changes to reserves,” he added. “Our allowance for loan losses is well established to absorb any inherent losses in our portfolio and increased during the quarter on higher commercial loan growth.”
The company originated approximately 1,900 Paycheck Protection Program loans, totaling $131.6 million. Net unearned fees remaining on PPP loans at the end of Q3 were $3.8 million and accretion will accelerate as the loans are reimbursed by the Small Business Administration, Simard said.
“At this time, we have submitted over 50% of PPP loans to the SBA for forgiveness, pending approval, and our teams continue to work closely with customers on the remaining balance,” he said.
He continued, “Despite the significant challenges posed by the COVID-19 pandemic and related market conditions, we continue to maintain high levels of capital and liquidity, diversified revenue streams, strong credit performance and an exceptional core deposit base. We are confident in our business model to grow investor returns while maintaining our culture and commitment to customers, employees and communities throughout this economic cycle.”
Bar Harbor Bank & Trust has assets of $3.9 billion and operates over 50 branches across northern New England.
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