Bar Harbor Bankshares, Inc. · AMEX:BHB
Bar Harbor Bankshares — Shareholder Meeting (May 2016)
32 slides from Bar Harbor Bankshares's shareholder meeting presentation, May 17, 2016
Slide 1: Annual Shareholders' Meeting
ANNUAL SHAREHOLDERS’ MEETING May 17,2016
Slide 2: Safe Harbor Statement
Safe Harbor Statement ‘This presentation contains certain statements that may be considered forward-ooking statements as defined in the Private Securities Litigation Reform Act of 1995, induding certain phrases, expectations, goals, projections and statements which are subject to numerous risks and
Slide 3: 2015 General and Economic Environment
2015 General and Economic Environment + Continued slow pace of economic recovery + Monetary policy leaning towards tightening + Long term interest rates continued near historic lows + Fairly flat Treasury yield curve + Backdrop of heavy regulation + Higher expectations for customer delivery channels
Slide 4: 2015 Environment Specific to BHB
2015 Environment Specific to BHB + Successful tourist season + Strong lobster landings + Wild blueberry season — good volume but lower pricing + Loan demand challenged by brisk competition — creating pricing and structure pressures + Improved attention to small business banking relationships + Impro
Slide 5: 2015 Financial Achievements
2015 Financial Achievements + Record earnings & EPS + Increased dividends in every quarter + Higher levels of net interest income and non-interest income + Efficiency ratio of 56.3% + Average earning asset growth of $97.3MM, or 7.1% + Loan growth of $71.0MM, or 7.7% + Deposit growth of $84.7MM, or 9
Slide 6: Recognition of Performance and Culture
Recognition of Performance and Culture «American Banker, Top 200 Community Banks ° Bank Director, America’s Top Performing Banks BAR HARBOR 5 BANKSHARES ANNUAL SHAREHOLDERS’ MEETING « MAY 17,2016
Slide 7: First Quarter 2016
First Quarter 2016 The momentum continues... + Record Earnings & EPS + ROA — 1.10% + ROE — 11.18% + Efficiency Ratio — 57.4% + Commercial loan growth of $22.6 million, or 4.5% + Stable credit quality + Twentieth consecutive quarterly cash dividend increase ANNUAL SHAREHOLDERS’ MEETING « MAY 17, 2016
Slide 8: Investments in Our Future
Investments in Our Future Focus in 2015 + Leadership and organizational structure + Risk and credit infrastructure + Products and technology + Improved delivery model for expediting small business loans + Corporate headquarters renovation y BAR HARBOR, Sr ‘ANNUAL SHAREHOLDERS’ MEETING + MAY 17, 2016
Slide 9: Investments in Our Future
Investments in Our Future Improving the Customer and Employee Experience drives performance and creates shareholder value and... is central to the Bar Harbor Bank & Trust Brand Uinietates — way ANNUAL SHAREHOLDERS’ MEETING + MAY 17, 2016
Slide 10: Financial Condition
Slide 11: Total Assets
Total Assets (Sin millions) 1200 ‘ew LOANS up $74,010, aa67 or7 7% 2011” 2012 2013-2014 «2018 Loans sSecurties wOther BAR HARBOR u cnaselcand ANNUAL SHAREHOLDERS’ MEETING « MAY 17, 2016
Slide 12: Loan Portfolio
Loan Portfolio 12131/15 Lodging industry represents Shire of CR mortgage portfolio Home Tax PORTFOLIO. YIELI ait BAR HARBOR 12 BANKSHARES ANNUAL SHAREHOLDERS’ MEETING = MAY 17, 2016
Slide 13: Investment Securities
Investment Securities 15.7% No municipal debt obligations rated below investment grade +2015 Portfolio yield - 3.52% + Portfolio duration - Less than 5 years BAREARBOR os . ANKSHAR ay. ANNUAL SHAREHOLDERS’ MEETING - MAY 17, 2016
Slide 14: Non-Performing to Total Loans
Non-Performing to Total Loans Not reflective of credit “seterioration & BAR HARBOR, Sn ANNUAL SHAREHOLDERS’ MEETING « MAY 17, 2016 BANKSHARES: —
Slide 15: Net Charge-Offs to Average Loans
0.60% £m BAR HARBOR DANKSHARES ae Net Charge-Offs to Average Loans One Telationship 2011 2012 2013 2014 2015 & ANNUAL SHAREHOLDERS’ MEETING = MAY 17, 2016
Slide 16: Total Deposits
Total Deposits (Sin millions) TOTAL i DEPOSITS. y BAR HARBOR, a : ANNUAL SHAREHOLDERS” MEETING + MAY 17, 2016 BANKSHARES: —
Slide 17: "Well Capitalized"
“Well Capitalized” Capital Ratios wAdequate =Well =BHB . BAR HARBOR : ANNUAL SHAREHOLDERS’ MEETING « MAY 17, 2016 BANKSHARES: —
Slide 18: Results of Operations
Slide 19: Net Income
Net Income (Sin millions) 2006” 2007 2008 2009 | 2010 | 2011 | 2012-2013. 2014 2015 BAR HARBOR Vv — : ANNUAL SHAREHOLDERS’ MEETING « MAY 17, 2016
Slide 20: Efficiency Ratio
Lm BAR HARBOR DANKSHARES ae Efficiency Ratio 20.3% | i | j | 2012 2013 2014 2015 2011 8BHB =ProxyPeer MUBPR Peer ANNUAL SHAREHOLDERS’ MEETING + MAY 17, 2016
Slide 21: Return On Average Assets
Return On Average Assets 2011 2012 2013 2014 2015 FDIC Nottheast Peers mBHB BAR HARBOR 2 BANKSHARES ANNUAL SHAREHOLDERS" MEETING « MAY 17,2016
Slide 22: Return On Average Equity
Return On Average Equity 12.00% 402% 10.69% 9.94% 9.90% 10.01% 10.00% 2.00% 6.00% 4.00% 2011 2012 2013 2014 2015 =BHB ProxyPeer mFDIC Nottheast Peer i i roxy Pear — Aveage 0f20 publi tated commersal ard savingsbarksin he Norheast FDIC Nertcast Peer Averageo!eeSbankholirg companies ocabd in fe Norbea
Slide 23: EPS & Shareholder Dividends
EPS & Shareholder Dividends DIVIDENDS up $0.11, or 11.6% MEPS "Dividends ry’ BAR HARBOR iG _ ANNUAL SHAREHOLDERS’ MEETING « MAY 17, 2016 BANKSHARES: —
Slide 24: Total Shareholder Return
Total Shareholder Return COMPARISON OF 5YEAR CUMULATIVE TOTAL RETURN ‘Among Bar Harbor Bankshares, the NYSE MKT Composite Index, ‘the SAP 200 Index and ABA Nasdaq Community Bank Index & BAR HARBOR, Sn ANNUAL SHAREHOLDERS’ MEETING « MAY 17, 2016 BANKSHARES: —
Slide 25: Bar Harbor Bankshares and Lake Sunapee Bank Group Combine
Bar Harbor Bankshares and Lake Sunapee Bank Group Combine to Create a Leading Northern New England Banking Institution 4mq BARH OR Announced BANKSHARES May 5, 2016
Slide 26: Safe Harbor Statement
Safe Harbor Statemen SAFE HARBOR “This presentation cotsinscertinfonardooking statements within the meaning ofthe Pate Secures Ligation Refom Act of 1995 about the proposed ‘merger of Bar Hartor Sarcahara (Sar Harbor) ana Late Sunapee Sark Group (Lake Sunspet) These aatanants olde statements ragerng
Slide 27: @ BHB (15)
@ BHB (15) os 4 r BAR HARBOR . BANKSHARES NAS
Slide 28: Attractive Combined Franchise
Attractive Combined Franchise Sheet 3/31/201 Assets $1,622 $1564 $3,186 Gross Loans $1,007 $1,222 $2,229 Deposits $963 $1141 $2,104 Market Capitalization and Branch Totals Market Capitalization* $208 S119 $352 Branches 15 35 50 Trust & Financial Services - 2015 Trust AUM (As of 12/34/15) $403 $1548
Slide 29: Transaction Terms
Transaction Terms Aggregate Consideration: Approximately $143 milliont2 Consideration Mix: 100% Stock Per Share Consideration: $17.00 per share? Board Composition: 45 Total (Eleven BHB/ Four LSBG) Approval Requirements: BHB & LSBG Shareholder Approval Customary Regulatory Approval Anticipated Closin
Slide 30: Transaction Value and Pricing
Ti id P ig Key Transaction and Model Assumptions Transaction Value and Pricing Multiples + One-time, pre-tax costs of approximately $16.9 million saction Assumptions + Cost savings of 20% of LSBG's non- interest expense, or approximately $10.1 million when fully phased in + Gross credit mark of 1.0%
Slide 31: Near-Term Challenges
Near-Term Challenges + Successful integration of BHB and LSBG + Proactively managing increasing regulation + Managing interest rate risk while defending the net interest margin + Prolonged low interest rate environment + Sustaining credit discipline in the face of aggressive competition + Balancing
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Bar Harbor Bankshares — Shareholder Meeting (May 2016) on 6ix