Keefe, Bruyette & Woods increased its 12-month price target on Bar Harbor Bankshares (NYSE: BHB) to $35.00 from $34.00 on Monday, while leaving the stock's Market Perform rating unchanged.
The analyst action follows the bank's recent quarterly report, which showed operating earnings of $0.93 per share. Management's results were supported by a stronger-than-expected pre-provision net revenue, together with reduced loan loss provisions, which helped the quarter outperform analyst projections.
The bank's PPNR improvement was broad-based across its three business lines, with net interest income the primary contributor. Net interest margin widened by 6 basis points during the quarter, supporting NII growth within overall revenue performance.
On the lending side, Bar Harbor reported steady expansion in loan balances. Total loans increased at a 2% linked-quarter annualized rate, with commercial lending the most notable contributor, rising at an 8% annualized pace for the period.
Following the results, KBW adjusted its earnings model for Bar Harbor upward by roughly 1%. The firm said the revision reflects expectations for slightly lower provisions and improved fee income, which are expected to be partially offset by higher operating expenses.
Independent analyst revisions also point to a modest upward trend in near-term earnings expectations, with market data showing two analysts have recently increased their forecasts for the upcoming period.
KBW's decision to nudge the price target higher while maintaining a Market Perform stance signals a cautious view that recognizes recent momentum in revenue and provisions, but which keeps the bank's valuation in a neutral category pending further operational evidence.
Context and implications
The change in KBW's estimate is relatively small in magnitude, reflecting incremental improvement in key metrics rather than a material shift in the bank's outlook. The drivers cited by KBW - lower provisions, better fee income and higher expenses - are consistent with the components reported in the quarter.