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Bar Harbor Bankshares Reports Second Quarter Earnings

July 31, 2014

Bar Harbor Bankshares (NYSE MKT: BHB) (the “Company”) the parent company of Bar Harbor Bank & Trust (the “Bank”), today announced record net income of $3.9 million for the second quarter of 2014, representing an increase of $687 thousand, or 21.7%, compared with the second quarter of 2013. The Company also reported record diluted earnings per share of $0.65 for the quarter compared with $0.54 for the second quarter of 2013, representing an increase of $0.11, or 20.4%. The Company’s annualized return on average shareholders’ equity amounted to 11.53% for the quarter, up from 9.90% in the second quarter of 2013. The Company’s second quarter return on average assets amounted to 1.09%, up from 0.96% in the second quarter of 2013.

For the six months ended June 30, 2014, the Company reported record net income of $7.6 million, representing an increase of $1.3 million, or 19.7%, compared with the same period in 2013. The Company also reported record diluted earnings per share of $1.28, representing an increase of $0.20, or 18.5%, compared with the same period in 2013. The Company’s annualized return on average shareholders’ equity amounted to 11.79% for the six months ended June 30, 2014, up from 10.02% for the same period in 2013. The Company’s annualized return on average assets amounted to 1.10%, up from 0.98% for the six months ended June 30, 2013.

In making the announcement, the Company’s President and Chief Executive Officer, Curtis C. Simard, commented, “Looking back at the first half of 2014, we are pleased with the Company’s solid performance and earnings fundamentals, culminating with the announcement of our best quarterly and year-to-date earnings on record. Our second quarter results featured a $1.4 million, or 14.6% increase in net interest income compared with the same quarter last year. We achieved this performance by growing our average earning assets by almost $97 million, while, unlike most banks, our net interest margin expanded twenty basis points. Our second quarter total non-interest income was up 22.4% over the same quarter last year, led by a $251 thousand, or 29.5%, increase in trust and financial services fees, including fee income from retail brokerage activities. Our continued focus on the management of our operating expenses was also evident, with a year-to-date efficiency ratio of 54.2%, compared with 55.7% for the first half of last year.”

Mr. Simard continued, “The credit quality of our loan portfolio held stable during the first half of this year. Total non-performing loans declined 11.3% from year-end 2013, while other delinquent loans and potential problem loans posted a combined decline of 6.4%. Similarly, our net loan charge-offs were down 11.5%, from the first half of last year.”

In concluding, Mr. Simard added, “There continues to be aggressive competition for loan and deposit growth. We are nonetheless staying true to fundamentals and our brand promise. The result has been continued measured growth, pricing and expense discipline, and strong performance for our shareholders including our thirteenth consecutive quarterly cash dividend increase.”