Core Insights - Bar Harbor Bankshares (NYSE: BHB) is a small community bank based in Maine, operating under the name Bar Harbor Bank & Trust, which may not be widely recognized in the market [1] Company Overview - The company adopts a long-term, buy-and-hold investment strategy, focusing on stocks that can consistently deliver high-quality earnings, primarily in the dividend and income sectors [1] Investment Approach - The investment philosophy emphasizes sustainable earnings and a preference for dividend-paying stocks, indicating a focus on income generation for investors [1]

Core Insights - Five stocks have been added to the Zacks Rank 1 (Strong Buy) List, indicating strong potential for investment Group 1: Company Earnings Estimates - Tutor Perini Corporation (TPC) has seen a 55.4% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - OppFi Inc. (OPFI) has experienced a 15.5% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Bar Harbor Bankshares (BHB) has seen a 7.5% increase in the Zacks Consensus Estimate for its next year earnings over the last 60 days [2] - Watts Water Technologies, Inc. (WTS) has experienced a 5.8% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] - Gilat Satellite Networks Ltd. (GILT) has seen a significant 78.8% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [3]

Core Insights - Three bank holding companies are highlighted as strong investment opportunities due to their earnings growth and attractive dividend yields Group 1: Bar Harbor Bankshares (BHB) - The Zacks Consensus Estimate for Bar Harbor Bankshares' current year earnings has increased by 7.5% over the last 60 days [1] - The company has a dividend yield of 4.3%, which is significantly higher than the industry average of 2.7% [1] Group 2: Citizens Financial Services, Inc. (CZFS) - The Zacks Consensus Estimate for Citizens Financial Services' current year earnings has increased by 5.5% over the last 60 days [2] - The company offers a dividend yield of 3.7%, above the industry average of 2.7% [2] Group 3: Farmers & Merchants Bancorp, Inc. (FMAO) - The Zacks Consensus Estimate for Farmers & Merchants Bancorp's current year earnings has increased by 6.6% over the last 60 days [3] - The company has a dividend yield of 3.7%, which is also higher than the industry average of 2.7% [3]

[FORM 10-Q General Information](index=1&type=section&id=FORM%2010-Q%20General%20Information) This section provides general information about the Quarterly Report on Form 10-Q, including registrant details and filing period - The document is a Quarterly Report on Form 10-Q for the period ended June 30, 2025, filed by BAR HARBOR BANKSHARES[1](index=1&type=chunk)[2](index=2&type=chunk) Registrant Information | Field | Value | | :---------------------------------- | :------------------------------------------------------------------- | | Commission File Number | 001-13349 | | State of Incorporation | Maine | | I.R.S. Employer Identification No. | 01-0393663 | | Principal Executive Offices Address | PO Box 400, 82 Main Street, Bar Harbor, ME 04609-0400 | | Registrant's Telephone Number | (207) 288-3314 | | Common Stock Trading Symbol | BHB | | Exchange | NYSE American | | Filer Status | Accelerated Filer | | Common Stock Outstanding (Aug 4, 2025) | 16,682,898 shares | | Shell Company | No | [INDEX](index=3&type=section&id=INDEX) This section provides an overview of the Form 10-Q's structure, detailing its financial and other information parts - The index outlines the structure of the Form 10-Q, including Part I (Financial Information with Consolidated Financial Statements and Management's Discussion and Analysis) and Part II (Other Information covering Legal Proceedings, Risk Factors, and Exhibits)[5](index=5&type=chunk) [Cautionary Statement Regarding Forward-Looking Statements](index=5&type=section&id=CAUTIONARY%20STATEMENT%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This statement warns that forward-looking information is subject to various risks and uncertainties that could cause actual results to differ - The report contains forward-looking statements subject to risks, uncertainties, and other factors that may cause actual results to differ materially from those expressed or implied[7](index=7&type=chunk) - Key risk factors include changes in general business and economic conditions, consumer behavior, asset quality, liquidity needs, competition, interest rate increases, operational risks (e.g., cybersecurity, climate change), lack of strategic growth opportunities, regulatory changes, and reductions in wealth management assets[9](index=9&type=chunk) [PART I. FINANCIAL INFORMATION](index=7&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited consolidated financial statements of Bar Harbor Bankshares and its subsidiaries, along with management's discussion and analysis of the company's financial condition and results of operations for the three and six months ended June 30, 2025 [Item 1. Consolidated Financial Statements (Unaudited)](index=7&type=section&id=ITEM%201.%20CONSOLIDATED%20FINANCIAL%20STATEMENTS%20%28Unaudited%29) This item includes the unaudited consolidated balance sheets, statements of income, comprehensive income, changes in shareholders' equity, and cash flows, along with condensed notes providing detailed accounting policies and disclosures for the interim periods [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) This section presents the company's unaudited consolidated balance sheets, detailing assets, liabilities, and shareholders' equity at specific dates Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------- | :------------ | :---------------- | | Total assets | $4,112,005 | $4,083,327 | | Cash and cash equivalents | $87,035 | $72,162 | | Net loans held for investment | $3,123,779 | $3,118,352 | | Total deposits | $3,291,988 | $3,267,688 | | Total borrowings | $297,061 | $290,601 | | Total shareholders' equity | $468,860 | $458,428 | [Consolidated Statements of Income](index=9&type=section&id=Consolidated%20Statements%20of%20Income) This section provides the unaudited consolidated statements of income, detailing revenues, expenses, and net income for the reported periods Consolidated Statements of Income Highlights (in thousands, except EPS) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total interest and dividend income | $48,688 | $46,838 | $96,226 | $92,661 | | Total interest expense | $18,793 | $19,079 | $37,324 | $36,847 | | Net interest income | $29,895 | $27,759 | $58,902 | $55,814 | | Provision for credit losses on loans | $528 | $585 | $471 | $874 | | Total non-interest income | $4,646 | $9,457 | $13,564 | $17,843 | | Total non-interest expense | $26,538 | $23,842 | $51,189 | $47,330 | | Net income | $6,092 | $10,257 | $16,303 | $20,352 | | Basic EPS | $0.40 | $0.67 | $1.06 | $1.34 | | Diluted EPS | $0.40 | $0.67 | $1.06 | $1.33 | [Consolidated Statements of Comprehensive Income](index=11&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents the unaudited consolidated statements of comprehensive income, including net income and other comprehensive income components Consolidated Statements of Comprehensive Income Highlights (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $6,092 | $10,257 | $16,303 | $20,352 | | Total other comprehensive income (loss) | $15 | $(2,919) | $2,727 | $(5,625) | | Total comprehensive income | $6,107 | $7,338 | $19,030 | $14,727 | [Consolidated Statements of Changes in Shareholders' Equity](index=12&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) This section details the changes in shareholders' equity, reflecting net income, dividends, and other comprehensive income adjustments - Total shareholders' equity increased from **$458,428 thousand** at December 31, 2024, to **$468,860 thousand** at June 30, 2025[10](index=10&type=chunk)[15](index=15&type=chunk) - Cash dividends declared for the three months ended June 30, 2025, were **$0.32 per share**, totaling **$5,040 thousand**[15](index=15&type=chunk) - Net income for the six months ended June 30, 2025, was **$16,303 thousand**, contributing to retained earnings[11](index=11&type=chunk)[14](index=14&type=chunk) [Consolidated Statements of Cash Flows](index=14&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section presents the unaudited consolidated statements of cash flows, categorizing cash activities into operating, investing, and financing Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | $14,588 | $15,612 | | Net cash provided by (used in) investing activities | $(20,959) | $(57,262) | | Net cash used in financing activities | $21,244 | $48,644 | | Net change in cash and cash equivalents | $14,873 | $6,994 | | Cash and cash equivalents at end of period | $87,035 | $101,836 | [Condensed Notes to Unaudited Consolidated Interim Financial Statements](index=16&type=section&id=Condensed%20Notes%20to%20Unaudited%20Consolidated%20Interim%20Financial%20Statements) This section provides detailed notes to the unaudited consolidated interim financial statements, covering accounting policies, specific asset and liability categories, capital ratios, earnings per share, derivatives, fair value measurements, and revenue recognition [Note 1. Basis of Presentation](index=16&type=section&id=NOTE%201.%20BASIS%20OF%20PRESENTATION) This note details the basis of preparation for the unaudited consolidated financial statements, confirming adherence to GAAP and SEC regulations, and clarifies that the company operates in one reportable segment: community banking - The financial statements are prepared in conformity with GAAP and in accordance with Form 10-Q instructions and Article 10 of Regulation S-X[18](index=18&type=chunk)[19](index=19&type=chunk) - The Company operates in one reportable segment, primarily community banking services including lending, deposits, business services, investment management, trust, and third-party brokerage[22](index=22&type=chunk) - ASU 2023-09 (Income Taxes) requires enhanced income tax disclosures for public business entities, with required adoption for annual periods beginning after December 15, 2024, and interim periods beginning after December 15, 2025[23](index=23&type=chunk) [Note 2. Securities Available for Sale](index=18&type=section&id=NOTE%202.%20SECURITIES%20AVAILABLE%20FOR%20SALE) This note provides a summary of available-for-sale (AFS) debt securities, including their amortized cost, unrealized gains/losses, fair value, and credit quality information, along with details on impairment losses recognized Available-for-Sale Debt Securities (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Total AFS debt securities (Fair Value) | $528,690 | $521,018 | | Total AFS debt securities (Amortized Cost) | $592,777 | $583,316 | | Gross Unrealized Gains | $613 | $5,954 | | Gross Unrealized Losses | $(64,700) | $(68,252) | | Allowance for credit losses | $0 | $(568) | - Management recognized impairment losses of **$4.9 million** on available-for-sale debt securities and other receivables during Q2 2025, primarily due to credit deterioration and the Company's decision not to hold the security until recovery[25](index=25&type=chunk)[26](index=26&type=chunk)[178](index=178&type=chunk) - A **$1.2 million** allowance for credit losses on corporate bonds was charged-off during the six months ended June 30, 2025, resulting in a zero ending balance for the allowance[27](index=27&type=chunk) [Note 3. Loans and Allowance for Credit Losses](index=25&type=section&id=NOTE%203.%20LOANS%20AND%20ALLOWANCE%20FOR%20CREDIT%20LOSSES) This note details the loan portfolio segmentation, the allowance for credit losses (ACL) activity, credit quality indicators, past due and non-accrual loans, and information on loan modifications and mortgage banking activities Loan Portfolio and Allowance for Credit Losses (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Total loans | $3,152,664 | $3,147,096 | | Allowance for credit losses | $28,885 | $28,744 | | Net loans | $3,123,779 | $3,118,352 | Allowance for Credit Losses Activity (in thousands) | Metric | 3 Months Ended June 30, 2025 | 6 Months Ended June 30, 2025 | | :--------------------------------- | :--------------------------- | :--------------------------- | | Beginning Balance | $28,614 | $28,744 | | Charge Offs | $(266) | $(350) | | Recoveries | $9 | $20 | | Provision | $528 | $471 | | Ending Balance | $28,885 | $28,885 | Past Due and Non-Accrual Loans (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Total Past Due Loans (30-90+ days) | $8,320 | $20,334 | | Non-Accrual Loans | $9,734 | $6,994 | [Note 4. Borrowed Funds](index=41&type=section&id=NOTE%204.%20BORROWED%20FUNDS) This note outlines the company's borrowed funds, including FHLB advances, subordinated notes, and repurchase agreements, detailing their carrying values, weighted average rates, and maturities Borrowed Funds Summary (in thousands, except rates) | Category | June 30, 2025 Carrying Value | June 30, 2025 Weighted Average Rate | December 31, 2024 Carrying Value | December 31, 2024 Weighted Average Rate | | :----------------------- | :----------------------------- | :---------------------------------- | :----------------------------- | :---------------------------------- | | Short-term borrowings | $256,177 | 4.27% | $249,712 | 4.35% | | Long-term borrowings | $40,884 | 7.47% | $40,889 | 6.59% | | Total | $297,061 | 4.71% | $290,601 | 4.75% | - The available secured line of credit at the Federal Reserve Bank was **$102.9 million** at June 30, 2025, down from **$105.6 million** at December 31, 2024[84](index=84&type=chunk) - The company maintains an unused unsecured federal funds line of credit of **$40.0 million** as of June 30, 2025[85](index=85&type=chunk) [Note 5. Deposits](index=45&type=section&id=NOTE%205.%20DEPOSITS) This note provides a summary of the company's deposit base, including non-interest bearing, interest-bearing demand, savings, money market, and time deposits, along with their scheduled maturities and details on brokered and reciprocal deposits Time Deposits by Amount (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Time less than $100,000 | $467,007 | $439,648 | | Time $100,000 through $250,000 | $220,004 | $203,962 | | Time $250,000 or more | $207,761 | $186,664 | | Total | $894,772 | $830,274 | Time Deposits Scheduled Maturities (in thousands) | Maturity | June 30, 2025 | December 31, 2024 | | :------------------ | :------------ | :---------------- | | Within 1 year | $874,250 | $806,974 | | Over 1 year to 2 years | $14,500 | $16,422 | | Over 2 years to 3 years | $3,293 | $4,028 | | Over 3 years to 4 years | $1,451 | $1,805 | | Over 4 years to 5 years | $1,265 | $931 | | Over 5 years | $13 | $114 | | Total | $894,772 | $830,274 | - Brokered deposits totaled **$270.8 million** at June 30, 2025, up from **$256.0 million** at December 31, 2024. Reciprocal deposits were **$64.1 million** at June 30, 2025, up from **$62.5 million** at December 31, 2024[92](index=92&type=chunk) [Note 6. Capital Ratios and Shareholders' Equity](index=46&type=section&id=NOTE%206.%20CAPITAL%20RATIOS%20AND%20SHAREHOLDERS%27%20EQUITY) This note details the company's and the bank's regulatory capital ratios, confirming they exceed all minimum requirements to be considered "well capitalized." It also presents the components of accumulated other comprehensive income (loss) - Both the Company and the Bank exceeded all regulatory capital requirements and were considered **"well capitalized"** for regulatory purposes at June 30, 2025[98](index=98&type=chunk) Capital Ratios at June 30, 2025 | Ratio | Company Actual | Company Minimum Required for Capital Adequacy | Bank Actual | Bank Minimum Required to be Well Capitalized | | :------------------------------------ | :------------- | :-------------------------------------------- | :---------- | :------------------------------------------- | | Total capital to risk-weighted assets | 13.76% | 8.00% | 13.72% | 10.00% | | Common equity Tier 1 capital to risk-weighted assets | 11.73% | 4.50% | 12.77% | 6.50% | | Tier 1 capital to risk-weighted assets | 12.34% | 6.00% | 12.77% | 8.00% | | Tier 1 capital to average assets (leverage ratio) | 10.37% | 4.00% | 10.72% | 5.00% | Accumulated Other Comprehensive Loss (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :------------------------------------------------- | :------------ | :---------------- | | Net unrealized loss on AFS securities, net of reclassifications | $(56,105) | $(62,298) | | Net unrealized loss on hedging derivatives | $(6,427) | $(3,368) | | Net unrealized loss on post-retirement plans | $(1,565) | $(1,565) | | Income taxes related to AFS securities | $13,403 | $14,557 | | Income taxes related to hedging derivatives | $1,533 | $786 | | Income taxes related to post-retirement plans | $352 | $352 | | **Accumulated other comprehensive loss** | **$(48,809)** | **$(51,536)** | [Note 7. Earnings per Share](index=54&type=section&id=NOTE%207.%20EARNINGS%20PER%20SHARE) This note provides the calculation of basic and diluted earnings per share for the three and six months ended June 30, 2025, and 2024, based on net income and weighted average common shares outstanding Earnings Per Share (in thousands, except per share data) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $6,092 | $10,257 | $16,303 | $20,352 | | Basic EPS | $0.40 | $0.67 | $1.06 | $1.34 | | Diluted EPS | $0.40 | $0.67 | $1.06 | $1.33 | | Weighted average basic common shares outstanding | 15,320,665 | 15,227,457 | 15,312,202 | 15,212,897 | | Weighted average diluted common shares outstanding | 15,372,201 | 15,275,421 | 15,382,066 | 15,272,679 | [Note 8. Derivative Financial Instruments and Hedging Activities](index=55&type=section&id=NOTE%208.%20DERIVATIVE%20FINANCIAL%20INSTRUMENTS%20AND%20HEDGING%20ACTIVITIES) This note describes the company's use of derivative instruments, including interest rate swaps and forward sale commitments, to manage interest rate risk and facilitate customer strategies, detailing their fair values and impact on financial statements Derivative Instruments Summary (in thousands) | Category | June 30, 2025 Notional Amount | June 30, 2025 Fair Value Asset (Liability) | December 31, 2024 Notional Amount | December 31, 2024 Fair Value Asset (Liability) | | :--------------------------------- | :------------------------------ | :----------------------------------- | :------------------------------ | :----------------------------------- | | Cash flow hedges | $50,000 | $(1,188) | $75,000 | $(1,775) | | Fair value hedges | $37,190 | $2,744 | $37,190 | $3,969 | | Economic hedges | $858,402 | $(54) | $809,452 | $13 | | Non-hedging derivatives | $5,193 | $238 | $3,760 | $85 | | **Total** | **$950,785** | **$1,740** | **$925,402** | **$2,292** | - The company uses interest rate swaps for cash flow hedges (on variable rate loans) and fair value hedges (on fixed rate callable securities) to mitigate interest rate volatility[107](index=107&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk) - Economic hedges include forward sale commitments for residential mortgage loans and customer loan derivatives, with risks mitigated by offsetting agreements with third-party financial institutions[124](index=124&type=chunk)[125](index=125&type=chunk) [Note 9. Fair Value Measurements](index=69&type=section&id=NOTE%209.%20FAIR%20VALUE%20MEASUREMENTS) This note provides a detailed breakdown of financial assets and liabilities measured at fair value on a recurring and non-recurring basis, categorized by the fair value hierarchy (Level 1, 2, and 3 inputs), and explains the valuation techniques and unobservable inputs used Recurring Fair Value Measurements (in thousands) | Category | June 30, 2025 Fair Value | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | | :--------------------------------- | :----------------------- | :------------- | :------------- | :------------- | | Available for sale securities | $528,690 | $0 | $526,287 | $2,403 | | Loans held for sale | $2,829 | $0 | $2,829 | $0 | | Derivative assets | $12,625 | $0 | $12,387 | $238 | | Derivative liabilities | $(10,885) | $0 | $(10,831) | $(54) | - A corporate bond with a fair value of **$2.4 million** was transferred into Level 3 during Q2 2025 due to a change in valuation technique to a discounted cash flow approach, incorporating unobservable inputs like discount rate, expected cash flows, and loss severity[143](index=143&type=chunk) Non-Recurring Fair Value Measurements (in thousands) | Category | June 30, 2025 Level 3 Inputs | | :-------------------------- | :--------------------------- | | Individually evaluated loans | $3,583 | | Capitalized servicing rights | $6,729 | | Premises held for sale | $405 | | **Total** | **$10,717** | [Note 10. Revenue from Contracts with Customers](index=80&type=section&id=NOTE%2010.%20REVENUE%20FROM%20CONTRACTS%20WITH%20CUSTOMERS) This note disaggregates non-interest income into revenue streams within and outside the scope of ASC 606, detailing how revenue is recognized for services like trust management, financial services, interchange fees, and customer deposit fees Non-Interest Income Disaggregation (in thousands) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Non-interest income within ASC 606 | $7,852 | $7,930 | $15,293 | $15,310 | | Non-interest income not within ASC 606 | $(3,206) | $1,527 | $(1,729) | $2,533 | | **Total non-interest income** | **$4,646** | **$9,457** | **$13,564** | **$17,843** | - The decrease in non-interest income not within the scope of ASC 606 for Q2 2025 was primarily driven by the **$4.9 million** write-down of an available-for-sale debt security[158](index=158&type=chunk)[197](index=197&type=chunk) - Revenue streams within ASC 606 include trust management fees (earned over time), financial services fees (point in time), interchange fees (point in time), and customer deposit fees (point in time)[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk)[163](index=163&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=83&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the company's financial condition and results of operations for the three and six months ended June 30, 2025, including discussions on key financial metrics, liquidity, capital, and asset quality, alongside reconciliations of non-GAAP financial measures [General](index=83&type=section&id=GENERAL) This section provides a general overview of Bar Harbor Bankshares, its business operations, and recent strategic developments - Bar Harbor Bankshares is a Maine-based bank holding company providing banking and nonbanking products and services primarily within its three-state footprint[168](index=168&type=chunk) - The company completed the acquisition of Guaranty Bancorp, Inc. and its bank subsidiary, Woodsville Guaranty Savings Bank, on July 31, 2025[169](index=169&type=chunk) [Non-GAAP Financial Measures](index=83&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) This section explains the use of non-GAAP financial measures to evaluate performance, emphasizing they should not replace GAAP measures - Non-GAAP financial measures are used to evaluate performance by excluding or including amounts not in GAAP, but should not be considered in isolation or as a substitute for GAAP measures[170](index=170&type=chunk)[172](index=172&type=chunk) [Quarterly Performance Summary](index=84&type=section&id=QUARTERLY%20PERFORMANCE%20SUMMARY) This section summarizes the company's financial performance for the quarter, highlighting key GAAP and non-GAAP metrics and significant changes Q2 2025 vs. Q2 2024 Performance Highlights | Metric | Q2 2025 | Q2 2024 | Change | | :--------------------------------- | :------ | :------ | :----- | | GAAP Net Income (in millions) | $6.1 | $10.3 | $(4.2) | | GAAP Diluted EPS | $0.40 | $0.67 | $(0.27) | | Core Earnings (Non-GAAP, in millions) | $10.8 | $10.0 | $0.8 | | Core Diluted EPS (Non-GAAP) | $0.70 | $0.66 | $0.04 | | Net Interest Income (in millions) | $29.9 | $27.8 | $2.1 | | Net Interest Margin (NIM) | 3.23% | 3.09% | 0.14 pp | | Non-Interest Income (in millions) | $4.6 | $9.5 | $(4.9) | | Non-Interest Expenses (in millions) | $26.5 | $23.8 | $2.7 | | Efficiency Ratio | 62.10% | 62.78% | (0.68 pp) | - The decrease in GAAP net income and non-interest income for Q2 2025 was primarily driven by a **$4.9 million** write-down of an available-for-sale debt security[174](index=174&type=chunk) - Asset quality remains strong, with non-performing assets to total assets at **0.30%** as of June 30, 2025, and minimal net charge-offs[171](index=171&type=chunk)[174](index=174&type=chunk) [Comparison of Financial Condition at June 30, 2025 and December 31, 2024](index=86&type=section&id=COMPARISON%20OF%20FINANCIAL%20CONDITION%20AT%20JUNE%2030%2C%202025%20AND%20DECEMBER%2031%2C%202024) This section analyzes the changes in the company's financial position between June 30, 2025, and December 31, 2024, focusing on key balance sheet items - Total assets remained stable at **$4.1 billion** at June 30, 2025, compared to December 31, 2024[174](index=174&type=chunk) Key Financial Condition Changes (in millions) | Metric | June 30, 2025 | December 31, 2024 | Change | | :--------------------------------- | :------------ | :---------------- | :----- | | Cash and cash equivalents | $87.0 | $72.2 | $14.8 | | Securities available for sale | $528.7 | $521.0 | $7.7 | | Total loans | $3,152.7 | $3,147.1 | $5.6 | | Total deposits | $3,292.0 | $3,267.7 | $24.3 | | Senior borrowings | $256.4 | $249.9 | $6.5 | | Book value per share | $30.60 | $30.00 | $0.60 | | Tangible book value per share (Non-GAAP) | $22.58 | $21.93 | $0.65 | - Total loans increased by **4% annualized**, driven by growth in commercial and industrial (**$30.2 million**) and commercial real estate (**$5.1 million**) segments[180](index=180&type=chunk)[181](index=181&type=chunk) - Deposit mix shifted, with money market deposits decreasing **$35.1 million**, offset by increases in time deposits (**$64.5 million**) and interest-bearing deposits (**$21.7 million**)[183](index=183&type=chunk) [Comparison of Operating Results for the Three Months and Six Months Ended June 30, 2025 and June 30, 2024](index=88&type=section&id=COMPARISON%20OF%20OPERATING%20RESULTS%20FOR%20THE%20THREE%20MONTHS%20AND%20SIX%20MONTHS%20ENDED%20JUNE%2030%2C%202025%20AND%20JUNE%2030%2C%202024) This section compares the company's operating results for the three and six months ended June 30, 2025, against the same periods in 2024, analyzing key income statement components Operating Results Comparison (in millions, except EPS) | Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :--------------------------------- | :------ | :------ | :------ | :------ | | GAAP Net Income | $6.1 | $10.3 | $16.3 | $20.4 | | Core Earnings (Non-GAAP) | $10.8 | $10.0 | $21.2 | $20.0 | | Net Interest Margin | 3.23% | 3.09% | 3.20% | 3.12% | | Total Interest & Dividend Income | $48.7 | $46.8 | $96.2 | $92.7 | | Total Interest Expense | $18.8 | $19.1 | $37.3 | $36.8 | | Non-Interest Income | $4.6 | $9.5 | $13.6 | $17.8 | | Non-Interest Expense | $26.5 | $23.8 | $51.2 | $47.3 | - Net interest income increased due to repricing of commercial adjustable-rate loans and higher commercial loan balances, leading to yield expansion on earning assets[189](index=189&type=chunk)[191](index=191&type=chunk) - Non-interest income significantly decreased in Q2 2025 primarily due to a **$4.9 million** write-down of an available-for-sale debt security[197](index=197&type=chunk) - Non-interest expenses increased due to **$1.2 million** in acquisition/conversion expenses related to the Guaranty merger and a **3%** increase in salaries and employee benefits[201](index=201&type=chunk) [Liquidity and Cash Flows](index=92&type=section&id=Liquidity%20and%20Cash%20Flows) This section discusses the company's liquidity position and cash flow activities, highlighting available resources and management strategies - Liquidity remains strong, with cash and available-for-sale securities representing approximately **15%** of total assets at June 30, 2025[171](index=171&type=chunk) - Available same-day liquidity totaled approximately **$1.0 billion** at June 30, 2025, including cash, FHLB borrowing capacity (**$278.6 million**), Federal Reserve Discount Window capacity (**$102.9 million**), and unused lines of credit (**$41.0 million**)[206](index=206&type=chunk) [Capital Resources](index=92&type=section&id=Capital%20Resources) This section reviews the company's capital adequacy, including regulatory capital ratios and dividend practices, confirming compliance with requirements - The Company and the Bank's capital levels exceeded all regulatory capital requirements and were considered **"well capitalized"** at June 30, 2025[98](index=98&type=chunk)[208](index=208&type=chunk) - The company expects to continue its practice of paying quarterly cash dividends, with **$9.6 million** paid for the six months ended June 30, 2025, compared to **$8.7 million** in the prior year[210](index=210&type=chunk) [Off-Balance Sheet Arrangements](index=94&type=section&id=Off-Balance%20Sheet%20Arrangements) This section describes the company's off-balance sheet arrangements, primarily standby letters of credit, and confirms no material changes since the last Form 10-K - Off-balance sheet arrangements are limited to standby letters of credit, which carry similar credit risk to loans and are managed with established procedures[212](index=212&type=chunk) - No material changes to off-balance sheet arrangements were reported since the previous Form 10-K[213](index=213&type=chunk) [Impact of New Accounting Pronouncements](index=94&type=section&id=IMPACT%20OF%20NEW%20ACCOUNTING%20PRONOUNCEMENTS) This section refers to detailed discussions on new accounting pronouncements that have been issued but not yet adopted by the company - Refer to Note 1, "Basis of Presentation - Recent Accounting Pronouncements," for discussion of accounting pronouncements issued but not yet adopted[214](index=214&type=chunk)[215](index=215&type=chunk) [Critical Accounting Policies and Estimates](index=94&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) This section highlights the critical accounting policies and estimates that require significant management judgment in preparing the financial statements - The preparation of consolidated financial statements requires management to make estimates, assumptions, and judgments that affect reported amounts[215](index=215&type=chunk) - There have been no significant changes in the application of critical accounting policies and estimates since December 31, 2024[215](index=215&type=chunk) [Selected Financial Data](index=96&type=section&id=SELECTED%20FINANCIAL%20DATA) This section provides a summary of selected financial data, including key performance metrics and balance sheet figures for the reported periods Selected Financial Data Highlights | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net earnings, diluted | $0.40 | $0.67 | $1.06 | $1.33 | | Adjusted earnings, diluted (Non-GAAP) | $0.70 | $0.66 | $1.38 | $1.31 | | Return on assets | 0.60% | 1.04% | 0.81% | 1.04% | | Adjusted return on assets (Non-GAAP) | 1.06% | 1.02% | 1.05% | 1.02% | | Net interest margin, fully taxable equivalent | 3.23% | 3.09% | 3.20% | 3.12% | | Total assets (in millions) | $4,112 | $4,034 | $4,112 | $4,034 | | Total loans (in millions) | $3,153 | $3,064 | $3,153 | $3,064 | | Total deposits (in millions) | $3,292 | $3,140 | $3,292 | $3,140 | [Consolidated Loan and Deposit Analysis](index=98&type=section&id=CONSOLIDATED%20LOAN%20AND%20DEPOSIT%20ANALYSIS%20%28UNAUDITED%29) This section provides an unaudited analysis of the company's loan and deposit portfolios, detailing their composition and growth trends Loan Analysis (in thousands, annualized growth %) | Loan Type | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Quarter to Date Growth % | | :------------------------ | :----------- | :----------- | :----------- | :----------------------- | | Commercial real estate | $1,767,206 | $1,762,132 | $1,741,223 | 1% | | Commercial and industrial | $400,908 | $370,683 | $388,599 | 33% | | Total commercial loans | $2,168,114 | $2,132,815 | $2,129,822 | 7% | | Residential real estate | $796,184 | $807,514 | $826,492 | (6)% | | Consumer | $111,036 | $105,404 | $103,803 | 21% | | Tax exempt and other | $77,330 | $78,507 | $86,979 | (6)% | | **Total loans** | **$3,152,664** | **$3,124,240** | **$3,147,096** | **4%** | Deposit Analysis (in thousands, annualized growth %) | Deposit Type | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Quarter to Date Growth % | | :------------------------ | :----------- | :----------- | :----------- | :----------------------- | | Non-interest bearing demand | $552,074 | $547,401 | $575,649 | 3% | | Interest-bearing demand | $931,854 | $930,031 | $910,191 | 1% | | Savings | $542,579 | $551,280 | $545,816 | (6)% | | Money market | $370,709 | $405,326 | $405,758 | (34)% | | Total non-maturity deposits | $2,397,216 | $2,434,038 | $2,437,414 | (6)% | | Time | $894,772 | $862,773 | $830,274 | 15% | | **Total deposits** | **$3,291,988** | **$3,296,811** | **$3,267,688** | **(1)%** | [Average Balances and Average Yields/Rates](index=99&type=section&id=AVERAGE%20BALANCES%20AND%20AVERAGE%20YIELDS%2FRATES%20%28UNAUDITED%29) This section provides unaudited average balances, yields, and rates for earning assets and interest-bearing liabilities, illustrating net interest margin trends Average Balances and Yields/Rates (Q2 2025 vs. Q2 2024, in thousands, except ratios) | Metric | Q2 2025 Average Balance | Q2 2025 Yield/Rate | Q2 2024 Average Balance | Q2 2024 Yield/Rate | | :--------------------------------- | :---------------------- | :----------------- | :---------------------- | :----------------- | | Total earning assets | $3,776,937 | 5.23% | $3,665,274 | 5.18% | | Total loans | $3,150,028 | 5.48% | $3,031,088 | 5.41% | | Total interest bearing deposits | $2,727,386 | 2.28% | $2,533,270 | 2.35% | | Total interest bearing liabilities | $2,998,796 | 2.51% | $2,911,391 | 2.64% | | Net interest spread | | 2.72% | | 2.55% | | Net interest margin | | 3.23% | | 3.09% | Average Balances and Yields/Rates (6M 2025 vs. 6M 2024, in thousands, except ratios) | Metric | 6M 2025 Average Balance | 6M 2025 Yield/Rate | 6M 2024 Average Balance | 6M 2024 Yield/Rate | | :--------------------------------- | :---------------------- | :----------------- | :---------------------- | :----------------- | | Total earning assets | $3,779,860 | 5.19% | $3,643,982 | 5.16% | | Total loans | $3,152,081 | 5.45% | $3,019,321 | 5.36% | | Total interest bearing deposits | $2,725,147 | 2.30% | $2,558,622 | 2.30% | | Total interest bearing liabilities | $2,992,683 | 2.52% | $2,898,955 | 2.56% | | Net interest spread | | 2.67% | | 2.60% | | Net interest margin | | 3.20% | | 3.12% | [Reconciliation of Non-GAAP Financial Measures](index=103&type=section&id=RECONCILIATION%20OF%20NON-GAAP%20FINANCIAL%20MEASURES%20%28UNAUDITED%29) This section provides unaudited reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures, offering additional insights into performance Non-GAAP Financial Measures Reconciliation (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :--------------------------------- | :------ | :------ | :------ | :------ | | Net income | $6,092 | $10,257 | $16,303 | $20,352 | | Total non-recurring items | $4,658 | $(227) | $4,907 | $(354) | | **Total adjusted income (Non-GAAP)** | **$10,750** | **$10,030** | **$21,210** | **$19,998** | | Adjusted earnings per share, diluted (Non-GAAP) | $0.70 | $0.66 | $1.38 | $1.31 | | Core return on assets (Non-GAAP) | 1.06% | 1.02% | 1.05% | 1.02% | | Efficiency ratio (Non-GAAP) | 62.10% | 62.78% | 62.05% | 62.75% | - Non-recurring items adjusted include loss/gain on available-for-sale debt securities, gain on sale of premises and equipment, and acquisition, conversion and other expenses[228](index=228&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=105&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This item discusses the company's exposure to market risk, primarily interest rate risk, and its management strategies through the Asset and Liability Committee (ALCO) and interest rate sensitivity modeling [Market Risk](index=105&type=section&id=Market%20Risk) This section identifies the primary market risks affecting the company, with a focus on interest rate risk and its oversight - The most significant market risk affecting the company is interest rate risk, with oversight provided by the Bank's Asset and Liability Committee (ALCO)[232](index=232&type=chunk)[233](index=233&type=chunk) [Interest Rate Risk](index=105&type=section&id=Interest%20Rate%20Risk) This section defines interest rate risk as arising from re-pricing, maturity, and cash flow imbalances, and outlines management's objectives for its mitigation - Interest rate risk arises from imbalances in the re-pricing, maturity, and cash flow characteristics of assets and liabilities[234](index=234&type=chunk) - Management's objectives are to measure, monitor, and develop strategies to preserve net interest income sensitivity and enhance profitability[234](index=234&type=chunk) [Interest Rate Sensitivity Modeling](index=105&type=section&id=Interest%20Rate%20Sensitivity%20Modeling) This section describes the bank's use of an interest rate risk model to simulate net interest income under various rate scenarios and presents the sensitivity results - The Bank utilizes an interest rate risk model to simulate the behavior of interest income and expense under different interest rate scenarios[237](index=237&type=chunk)[238](index=238&type=chunk) - As of June 30, 2025, interest rate sensitivity modeling results indicate the Bank's balance sheet was **asset sensitive** over the one- and two-year horizons[241](index=241&type=chunk) Net Interest Income Sensitivity (in thousands, % Change) | Change in Interest Rates (Basis Points) | 1 - 12 Months $ Change | 1 - 12 Months % Change | 13 - 24 Months $ Change | 13 - 24 Months % Change | | :-------------------------------------- | :--------------------- | :--------------------- | :---------------------- | :---------------------- | | At June 30, 2025 | | | | | | -200 | $(7,185) | (5.6)% | $(16,885) | (12.2)% | | -100 | $(3,003) | (2.3)% | $(7,570) | (5.5)% | | +100 | $2,903 | 2.3% | $6,575 | 4.7% | | +200 | $5,711 | 4.4% | $12,735 | 9.2% | [PART II. OTHER INFORMATION](index=109&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section contains other required disclosures not directly related to financial statements, including controls and procedures, legal proceedings, risk factors, equity sales, defaults, mine safety, and exhibits [Item 4. Controls and Procedures](index=109&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, ensuring timely and accurate reporting. No material changes in internal control over financial reporting occurred during the quarter - The company's disclosure controls and procedures were effective as of June 30, 2025, ensuring information required to be disclosed is recorded, processed, summarized, and reported timely[246](index=246&type=chunk) - There were no changes in internal control over financial reporting during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[247](index=247&type=chunk) [Item 1. Legal Proceedings](index=109&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is involved in routine litigation incidental to its business. Management believes the likelihood of a material adverse effect on its financial position from these proceedings is remote, though unfavorable outcomes could impact reputation and divert management attention - The company and its subsidiaries are parties to certain ordinary routine litigation incidental to their respective businesses[248](index=248&type=chunk) - Management believes the likelihood is remote that the impact of such proceedings would have a material adverse effect on the company's consolidated financial position[248](index=248&type=chunk) [Item 1A. Risk Factors](index=109&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section updates the risk factors from the previous Form 10-K, specifically highlighting risks related to the recently announced merger with Guaranty Bancorp, Inc., including potential failure to realize anticipated benefits and the incurrence of integration costs - There were no material changes to the risk factors discussed in Part I, Item 1A. "Risk Factors" of the company's Form 10-K, except as set forth in this section[249](index=249&type=chunk) - Risks associated with the merger with Guaranty Bancorp, Inc. include the potential failure to realize anticipated benefits and cost savings, and the incurrence of integration costs[250](index=250&type=chunk)[251](index=251&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=111&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) No unregistered equity securities were sold by the company during the quarter ended June 30, 2025 - No unregistered equity securities were sold by the Company during the quarter ended June 30, 2025[253](index=253&type=chunk) [Item 3. Defaults Upon Senior Securities](index=111&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) There were no defaults upon senior securities during the reported period - None[254](index=254&type=chunk) [Item 4. Mine Safety Disclosures](index=111&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company - Not applicable[255](index=255&type=chunk) [Item 5. Other Information](index=111&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025 - No director or officer adopted or terminated any "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the quarter ended June 30, 2025[256](index=256&type=chunk) [Item 6. Exhibits](index=112&type=section&id=ITEM%206.%20EXHIBITS) This item lists the exhibits filed with the Form 10-Q, including certifications, financial information in iXBRL format, and the interactive data file - Exhibits include certifications of the Chief Executive Officer and Chief Financial Officer, and financial information formatted in Inline Extensible Business Reporting Language (iXBRL)[259](index=259&type=chunk) [SIGNATURES](index=113&type=section&id=SIGNATURES) This section confirms the official signing of the report by the company's President & CEO and Executive Vice President & CFO - The report is signed by Curtis C. Simard, President & Chief Executive Officer, and Josephine Iannelli, Executive Vice President & Chief Financial Officer, on August 6, 2025[262](index=262&type=chunk)

Core Viewpoint - Bar Harbor Bankshares (BHB) has received a Zacks Rank 1 (Strong Buy) upgrade, indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with stock price movements, particularly due to institutional investors adjusting their valuations based on these estimates [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling actions that affect stock prices [4]. Recent Performance and Projections - For the fiscal year ending December 2025, Bar Harbor is projected to earn $2.92 per share, with a 3.5% increase in the Zacks Consensus Estimate over the past three months [8]. - The upgrade to Zacks Rank 1 reflects an improvement in Bar Harbor's underlying business, which is expected to drive the stock price higher as investor sentiment becomes more positive [5][10]. Zacks Rank System Overview - The Zacks Rank system categorizes stocks into five groups based on earnings estimate revisions, with only the top 5% receiving a "Strong Buy" rating, indicating superior potential for market-beating returns [7][9]. - Historically, Zacks Rank 1 stocks have generated an average annual return of +25% since 1988, showcasing the effectiveness of the rating system [7].

Group 1: Crescent Energy Company (CRGY) - Crescent Energy Company is an independent oil and natural gas company focused on acquiring, exploring, developing, and producing crude oil and natural gas properties primarily in the Gulf of Mexico and onshore in Texas, Oklahoma, Louisiana, and Wyoming [1] - The company has a Zacks Rank of 1 (Strong Buy) and has seen a 32.2% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1][2] - Crescent Energy has a price-to-earnings ratio (P/E) of 5.9, significantly lower than the industry average of 12.30, and holds a Value Score of A [2] Group 2: Bar Harbor Bankshares (BHB) - Bar Harbor Bankshares is a retail bank serving individual customers, small retail establishments, seasonal lodging, campgrounds, and restaurants [2] - The bank also carries a Zacks Rank of 1 and has experienced a 3.6% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2][3] - Bar Harbor Bankshares has a P/E ratio of 10.56, slightly below the industry average of 10.90, and possesses a Value Score of A [3] Group 3: Home Bancorp (HBCP) - Home Bancorp is a community-oriented savings bank offering a range of deposit and loan products primarily to individuals, families, and small to mid-sized businesses in its market area and contiguous markets in south central Louisiana [4] - The bank has a Zacks Rank of 1 and has seen a 6.3% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [4][5] - Home Bancorp has a P/E ratio of 10.60, which is lower than the industry average of 11.80, and holds a Value Score of B [5]

Group 1: Crescent Energy Company (CRGY) - Crescent Energy Company is an independent oil and natural gas company focused on acquiring, exploring, developing, and producing crude oil and natural gas properties primarily in the Gulf of Mexico and onshore in Texas, Oklahoma, Louisiana, and Wyoming [1] - The Zacks Consensus Estimate for Crescent Energy's current year earnings has increased by 32.2% over the last 60 days [1] Group 2: Bar Harbor Bankshares (BHB) - Bar Harbor Bankshares is a retail bank serving individual customers, small retail establishments, seasonal lodging, campgrounds, and restaurants [2] - The Zacks Consensus Estimate for Bar Harbor Bankshares' current year earnings has increased by 3.6% over the last 60 days [2] - The company has a dividend yield of 4.2%, compared to the industry average of 2.7% [2] Group 3: Huntington Ingalls Industries (HII) - Huntington Ingalls Industries designs, builds, and maintains nuclear-powered ships, including aircraft carriers and submarines, as well as non-nuclear ships for the U.S. Navy and Coast Guard [3] - The Zacks Consensus Estimate for Huntington Ingalls Industries' current year earnings has increased by 0.8% over the last 60 days [3] - The company has a dividend yield of 2%, compared to the industry average of 0.0% [4]

Company Performance - Bar Harbor Bankshares (BHB) reported quarterly earnings of $0.7 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.66 per share a year ago [1] - The bank's revenues for the quarter ended June 2025 were $34.54 million, missing the Zacks Consensus Estimate by 10.05%, and down from $37.39 million year-over-year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Bar Harbor shares have increased approximately 3.1% since the beginning of the year, compared to the S&P 500's gain of 7.2% [3] - The current Zacks Rank for Bar Harbor is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.71 on revenues of $38.8 million, and for the current fiscal year, it is $2.82 on revenues of $153.9 million [7] - The outlook for the industry, specifically the Banks - Northeast sector, is currently in the top 30% of over 250 Zacks industries, suggesting a favorable environment for performance [8]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) This section provides an overview of Bar Harbor Bankshares' second quarter 2025 performance, strategic developments, and dividend declaration [Second Quarter 2025 Performance Overview](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Overview) Bar Harbor Bankshares reported a decrease in GAAP net income for Q2 2025 compared to Q1 2025, while core earnings remained stable, with an expanding net interest margin Second Quarter 2025 Financial Performance | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | | :----------------------- | :------ | :------ | :----------- | | GAAP Net Income | $6.1M | $10.2M | -$4.1M | | GAAP Diluted EPS | $0.40 | $0.66 | -$0.26 | | Core Earnings (Non-GAAP) | $10.8M | $10.5M | +$0.3M | | Core Diluted EPS (Non-GAAP) | $0.70 | $0.68 | +$0.02 | - Net interest margin expanded to **3.23%** from 3.17% quarter-over-quarter[7](index=7&type=chunk) [Strategic Developments & Recognition](index=1&type=section&id=Strategic%20Developments%20%26%20Recognition) The company received all regulatory approvals for the acquisition of Guaranty Bancorp, Inc., aiming to strengthen market presence and operational scale, and was recognized by Forbes - Obtained all regulatory approvals to acquire Guaranty Bancorp, Inc., parent company of Woodsville Guaranty Savings Bank, to strengthen presence in key markets, increase operational scale, and expand services[2](index=2&type=chunk)[7](index=7&type=chunk) - Recognized by Forbes Magazine as one of America's 'Best-in-State Banks' for the fourth consecutive year, an honor awarded to less than **5%** of all U.S. banks[2](index=2&type=chunk)[7](index=7&type=chunk) [Dividend Declaration](index=1&type=section&id=Dividend%20Declaration) The Board of Directors declared a cash dividend of $0.32 per share, payable on September 12, 2025, to shareholders of record on August 14, 2025 Dividend Details | Metric | Value | | :------- | :---- | | Dividend Per Share | $0.32 | | Annualized Yield (based on June 30, 2025 closing price) | 4.27% | [Financial Condition (Quarter-over-Quarter Analysis)](index=1&type=section&id=Financial%20Condition%20%28Quarter-over-Quarter%20Analysis%29) This section analyzes Bar Harbor Bankshares' financial condition, focusing on quarter-over-quarter changes in assets, liabilities, and equity [Assets](index=1&type=section&id=Assets) Total assets remained stable at $4.1 billion, primarily due to strategic optimization of wholesale borrowings to fund loan originations, with increases in available-for-sale debt securities and total loans Asset Categories (Millions) | Asset Category | Q2 2025 (Millions) | Q1 2025 (Millions) | Change (QoQ) | | :--------------------------------- | :----------------- | :----------------- | :----------- | | Total Assets | $4,112 | $4,063 | +$49 | | Cash and Cash Equivalents | $87.0 | $88.1 | -$1.1 | | Available-for-Sale Debt Securities | $528.7 | $514.0 | +$14.7 | | Federal Home Loan Bank Stock | $12.7 | $10.7 | +$2.0 | | Total Loans | $3,153 | $3,124 | +$29 | | Allowance for Credit Losses on Loans | $28.9 | $28.6 | +$0.3 | - Total loans increased by **3% annualized growth**, driven by a **$30.2 million** increase in commercial and industrial loans and **$5.1 million** in commercial real estate[10](index=10&type=chunk) - Allowance for credit losses on loans increased by **$0.528 million**, more than offsetting **$0.257 million** in net charged-off loans, maintaining a coverage ratio of **0.92%** for both quarters[11](index=11&type=chunk) [Liabilities and Equity](index=3&type=section&id=Liabilities%20and%20Equity) Total deposits remained stable but experienced a shift in mix, with money market deposits decreasing and time deposits increasing, while book value and tangible book value per share both saw slight increases Deposit Mix (Millions) | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | | :--------------------------------- | :------ | :------ | :----------- | | Total Deposits | $3.29B | $3.29B | Stable | | Money Market Deposits | -$34.6M | | Decrease | | Time Deposits | +$32M | | Increase | | Non-Interest Bearing Demand Deposits | +$4.7M | | Increase | Per Share Metrics | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | | :-------------------------- | :------ | :------ | :----------- | | Book Value Per Share | $30.60 | $30.51 | +$0.09 | | Tangible Book Value Per Share (Non-GAAP) | $22.58 | $22.47 | +$0.11 | [Results of Operations (Year-over-Year Analysis)](index=3&type=section&id=Results%20of%20Operations%20%28Year-over-Year%20Analysis%29) This section provides a year-over-year analysis of Bar Harbor Bankshares' operational results, including net interest income, non-interest income and expense, and net income [Net Interest Income](index=3&type=section&id=Net%20Interest%20Income) Net interest margin increased year-over-year, driven by growth in loan balances and higher yields on earning assets, while total interest expense decreased due to lower interest-bearing deposit costs Net Interest Performance | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------- | :------ | :------ | :----------- | | Net Interest Margin | 3.23% | 3.09% | +0.14% | | Total Interest & Dividend Income | $48.7M | $46.8M | +3.9% | | Total Interest Expense | $18.8M | $19.1M | -1.5% | - Yield on loans grew **7 basis points** to **5.48%** in Q2 2025, up from 5.41% in Q2 2024, primarily driven by higher yielding commercial real estate loans[14](index=14&type=chunk) - Interest-bearing deposit costs decreased from **2.35%** to **2.28%** in Q2 2025, despite a **5%** increase in deposit balances year-over-year[16](index=16&type=chunk) [Non-Interest Income and Expense](index=3&type=section&id=Non-Interest%20Income%20and%20Expense) Non-interest income decreased significantly due to impairment losses on available-for-sale debt securities, while non-interest expenses increased, primarily driven by acquisition-related costs and higher salaries and benefits Non-Interest Performance | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :--------------------------------- | :------ | :------ | :----------- | | Provision for Credit Losses on Loans | $0.528M | $0.585M | -$0.057M | | Total Non-Interest Income | $4.6M | $9.5M | -$4.9M | | Total Non-Interest Expenses | $26.5M | $23.8M | +$2.7M | - Non-interest income decreased by **$4.8 million**, primarily due to **$4.9 million** in impairment losses on available-for-sale debt securities and other receivables[18](index=18&type=chunk) - Non-interest expenses increased by **$2.7 million**, driven by **$1.2 million** in acquisition expenses related to Woodsville and a **3%** increase in salaries and benefits[19](index=19&type=chunk)[20](index=20&type=chunk) [Net Income and Earnings Per Share](index=5&type=section&id=Net%20Income%20and%20Earnings%20Per%20Share) GAAP net income and diluted EPS decreased year-over-year, largely influenced by impairment losses on securities and increased non-interest expenses, partially offset by lower income tax expense Net Income and EPS | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----------------- | :------ | :------ | :----------- | | Net Income | $6.1M | $10.3M | -$4.2M | | Diluted EPS | $0.40 | $0.67 | -$0.27 | | Income Tax Expense | $1.4M | $2.5M | -$1.1M | | Effective Tax Rate | 19% | 20% | -1% | [Company Background](index=5&type=section&id=Company%20Background) This section provides an overview of Bar Harbor Bankshares, its history, and its operational scope [Company Overview](index=5&type=section&id=Company%20Overview) Bar Harbor Bankshares is the parent company of Bar Harbor Bank & Trust, a community bank founded in 1887, providing full-service community banking across Maine, New Hampshire, and Vermont - Bar Harbor Bankshares (NYSE American: BHB) is the parent company of Bar Harbor Bank & Trust, a community bank founded in 1887[22](index=22&type=chunk) - Bar Harbor Bank & Trust serves clients in Maine, New Hampshire, and Vermont[22](index=22&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section addresses the forward-looking nature of certain statements, outlining potential risks and uncertainties that could cause actual results to differ materially [Disclaimer and Risk Factors](index=5&type=section&id=Disclaimer%20and%20Risk%20Factors) This section outlines the forward-looking nature of certain statements, emphasizing that actual results may differ materially due to various known and unknown risks and uncertainties, and advises against undue reliance on these statements - Statements regarding future activities, events, or developments are 'forward-looking statements' subject to risks and uncertainties[23](index=23&type=chunk) - Key risk factors include changes in economic conditions, consumer behavior, asset quality, liquidity needs, competition, interest rates, loan demand, operational risks (e.g., cybersecurity), strategic growth execution (including acquisitions), regulatory changes, and market value fluctuations[23](index=23&type=chunk) - The company disclaims any obligation to update or revise any forward-looking statement[23](index=23&type=chunk) [Non-GAAP Financial Measures](index=7&type=section&id=Non-GAAP%20Financial%20Measures) This section explains the use of non-GAAP financial measures, such as core earnings and tangible book value, providing supplemental perspectives on operating results and financial condition [Explanation and Reconciliation](index=7&type=section&id=Explanation%20and%20Reconciliation) This section clarifies the use of non-GAAP financial measures, such as core earnings and tangible book value, which are provided to offer supplemental perspectives on operating results and financial condition, emphasizing they are not substitutes for GAAP - Non-GAAP measures (e.g., core earnings, core EPS, tangible book value) are used to provide supplemental perspectives on operating results and financial condition[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) - Core earnings exclude items unrelated to normalized operations, such as gains/losses on securities, acquisition costs, and restructuring costs, presented net of income tax expense[25](index=25&type=chunk) - Non-GAAP measures are not a substitute for GAAP measures and may not be comparable to similarly titled measures from other companies[24](index=24&type=chunk) [Consolidated Financial Schedules (Unaudited)](index=8&type=section&id=Consolidated%20Financial%20Schedules%20%28Unaudited%29) This section presents unaudited consolidated financial schedules, including selected financial highlights, balance sheets, loan and deposit analyses, statements of income, average yields and costs, average balances, asset quality analysis, and reconciliation of non-GAAP financial measures [Selected Financial Highlights](index=9&type=section&id=Selected%20Financial%20Highlights) This table summarizes key financial performance indicators and balance sheet data for Bar Harbor Bankshares across five quarters, including per share data, performance ratios, and financial data in millions Selected Financial Highlights | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :------------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Net earnings, diluted | $0.40 | $0.66 | $0.72 | $0.80 | $0.67 | | Core earnings, diluted (Non-GAAP) | $0.70 | $0.68 | $0.72 | $0.80 | $0.66 | | Total book value | $30.60 | $30.51 | $30.00 | $30.12 | $28.81 | | Tangible book value (Non-GAAP) | $22.58 | $22.47 | $21.93 | $22.02 | $20.68 | | Dividends | $0.32 | $0.30 | $0.30 | $0.30 | $0.30 | | Return on assets | 0.60 % | 1.02 % | 1.09 % | 1.20 % | 1.04 % | | Net interest margin, fully taxable equivalent (Non-GAAP) | 3.23 % | 3.17 % | 3.17 % | 3.15 % | 3.09 % | | Total assets (Millions) | $4,112 | $4,063 | $4,083 | $4,030 | $4,034 | | Total loans (Millions) | $3,153 | $3,124 | $3,147 | $3,082 | $3,064 | | Total deposits (Millions) | $3,292 | $3,297 | $3,268 | $3,261 | $3,140 | [Balance Sheets](index=11&type=section&id=Balance%20Sheets) This table presents the consolidated balance sheets, detailing assets, liabilities, and shareholders' equity for Bar Harbor Bankshares across five quarters Consolidated Balance Sheets (in thousands) | (in thousands) | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :--------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Total assets | $4,112,005 | $4,063,226 | $4,083,327 | $4,029,927 | $4,034,200 | | Total loans | $3,152,664 | $3,124,240 | $3,147,096 | $3,081,735 | $3,064,181 | | Total deposits | $3,291,988 | $3,296,811 | $3,267,688 | $3,261,086 | $3,140,466 | | Total shareholders' equity | $468,860 | $467,311 | $458,428 | $459,916 | $438,907 | [Loan and Deposit Analysis](index=13&type=section&id=Loan%20and%20Deposit%20Analysis) These tables provide a detailed breakdown of the company's loan portfolio by segment and deposit mix, including annualized growth rates for both quarter-to-date and year-to-date periods Loan Analysis (in thousands) | Loan Type | Jun 30, 2025 | Mar 31, 2025 | QTD Growth % (Annualized) | YTD Growth % (Annualized) | | :---------------------- | :----------- | :----------- | :------------------------ | :------------------------ | | Commercial real estate | $1,767,206 | $1,762,132 | 1 % | 3 % | | Commercial and industrial | $400,908 | $370,683 | 33 % | 6 % | | Total commercial loans | $2,168,114 | $2,132,815 | 7 % | 4 % | | Residential real estate | $796,184 | $807,514 | (6)% | (8)% | | Consumer | $111,036 | $105,404 | 21 % | 14 % | | Total loans | $3,152,664 | $3,124,240 | 4 % | — % | Deposit Analysis (in thousands) | Deposit Type | Jun 30, 2025 | Mar 31, 2025 | QTD Growth % (Annualized) | YTD Growth % (Annualized) | | :------------------------ | :----------- | :----------- | :------------------------ | :------------------------ | | Non-interest bearing demand | $552,074 | $547,401 | 3 % | (8)% | | Interest-bearing demand | $931,854 | $930,031 | 1 % | 5 % | | Savings | $542,579 | $551,280 | (6)% | (1)% | | Money market | $370,709 | $405,326 | (34)% | (17)% | | Time | $894,772 | $862,773 | 15 % | 16 % | | Total deposits | $3,291,988 | $3,296,811 | (1)% | 1 % | [Statements of Income](index=14&type=section&id=Statements%20of%20Income) These tables present the consolidated statements of income, showing revenues, expenses, and net income for both three-month and six-month periods ended June 30, 2025, compared to the prior year, as well as a five-quarter trend Three Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Total interest and dividend income | $48,688 | $46,838 | | Total interest expense | $18,793 | $19,079 | | Net interest income | $29,895 | $27,759 | | Total non-interest income | $4,646 | $9,457 | | Total non-interest expense | $26,538 | $23,842 | | Net income | $6,092 | $10,257 | | Diluted EPS | $0.40 | $0.67 | Six Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Total interest and dividend income | $96,226 | $92,661 | | Total interest expense | $37,324 | $36,847 | | Net interest income | $58,902 | $55,814 | | Total non-interest income | $13,564 | $17,843 | | Total non-interest expense | $51,189 | $47,330 | | Net income | $16,303 | $20,352 | | Diluted EPS | $1.06 | $1.33 | Net Income (in thousands, 5 Quarter Trend) | Quarter Ended | Net Income | | :------------ | :--------- | | Jun 30, 2025 | $6,092 | | Mar 31, 2025 | $10,211 | | Dec 31, 2024 | $10,999 | | Sep 30, 2024 | $12,193 | | Jun 30, 2024 | $10,257 | [Average Yields and Costs](index=16&type=section&id=Average%20Yields%20and%20Costs) This table provides annualized average yields on earning assets and costs on funding liabilities, presented on a fully taxable equivalent basis, across five quarters Average Yields and Costs | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :------------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Total earning assets yield | 5.23 % | 5.16 % | 5.14 % | 5.24 % | 5.18 % | | Total loans yield | 5.48 % | 5.42 % | 5.40 % | 5.49 % | 5.41 % | | Total interest-bearing deposits cost | 2.28 % | 2.31 % | 2.41 % | 2.45 % | 2.35 % | | Total interest-bearing liabilities cost | 2.51 % | 2.52 % | 2.54 % | 2.66 % | 2.64 % | | Net interest margin, fully taxable equivalent | 3.23 % | 3.17 % | 3.17 % | 3.15 % | 3.09 % | [Average Balances](index=17&type=section&id=Average%20Balances) This table details the average balances of assets, liabilities, and shareholders' equity for Bar Harbor Bankshares over five quarters Average Balances (in thousands) | (in thousands) | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :------------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Total earning assets | $3,776,937 | $3,781,402 | $3,720,560 | $3,728,024 | $3,665,274 | | Total loans | $3,150,028 | $3,153,902 | $3,098,082 | $3,071,638 | $3,031,088 | | Total interest-bearing deposits | $2,727,386 | $2,718,174 | $2,678,942 | $2,621,842 | $2,533,270 | | Total liabilities | $3,601,372 | $3,610,853 | $3,559,482 | $3,572,892 | $3,523,551 | | Total shareholders' equity | $469,242 | $466,150 | $459,706 | $454,149 | $436,198 | [Asset Quality Analysis](index=18&type=section&id=Asset%20Quality%20Analysis) This table provides an analysis of asset quality, including non-performing assets, provision and allowance for credit losses on loans, and net loan charge-offs/recoveries across five quarters Asset Quality Analysis (in thousands) | (in thousands) | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :------------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Total non-performing assets | $12,135 | $13,046 | $12,754 | $7,100 | $6,277 | | Total non-accruing loans/total loans | 0.31 % | 0.26 % | 0.22 % | 0.23 % | 0.20 % | | Allowance for credit losses on loans/total loans | 0.92 % | 0.92 % | 0.91 % | 0.94 % | 0.94 % | | Net charge-offs (recoveries) (QTD annualized)/average loans | 0.03 % | 0.01 % | 0.02 % | 0.01 % | 0.01 % | [Reconciliation of Non-GAAP Financial Measures](index=20&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) These tables provide a detailed reconciliation of non-GAAP financial measures to their most directly comparable GAAP measures, including core earnings, core revenue, core non-interest expense, and various performance ratios, along with supplementary data Reconciliation of Non-GAAP Financial Measures (in thousands) | (in thousands) | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :------------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Net income (GAAP) | $6,092 | $10,211 | $10,999 | $12,193 | $10,257 | | Total non-core items | $4,658 | $249 | $54 | $0 | -$227 | | Core earnings (Non-GAAP) | $10,750 | $10,460 | $11,053 | $12,193 | $10,030 | | Core earnings per share, diluted (Non-GAAP) | $0.70 | $0.68 | $0.72 | $0.80 | $0.66 | | Tangible book value per share, period end (Non-GAAP) | $22.58 | $22.47 | $21.93 | $22.02 | $20.68 | | Core return on assets (Non-GAAP) | 1.06 % | 1.04 % | 1.09 % | 1.20 % | 1.02 % | | Efficiency ratio (Non-GAAP) | 62.10 % | 62.00 % | 59.84 % | 62.09 % | 62.78 % |

Financial Performance - Bar Harbor Bankshares reported Q1 2025 GAAP net income of $10.2 million or $0.66 per diluted share, compared to $11.0 million or $0.72 per diluted share in Q4 2024[1][2]. - Net income for the quarter was $10,211,000, a slight increase from $10,095,000 in the previous year, representing a growth of 1.15%[44]. - Core earnings for Q1 2025 were reported at $10 million, consistent with $11 million in Q4 2024, showing resilience in core operations[35]. - Core earnings per share, diluted, decreased to $0.68 in Q1 2025 from $0.72 in Q4 2024, representing a decline of 5.56%[54]. - Basic earnings per share increased to $0.67, up from $0.66 in the same quarter last year[44]. Asset and Loan Management - Total assets remained stable at $4.1 billion, with total loans at $3.1 billion, reflecting a slight annualized decrease of 3%[5][7]. - Total loans decreased by 3% to $3,124 million compared to $3,147 million in Q4 2024, with commercial real estate loans growing by 5%[41]. - Total loans reached $3,153,902 thousand, an increase of 1.8% from $3,098,082 thousand in the previous quarter[49]. - Non-accruing loans totaled $8,086 thousand, up from $6,994 thousand in the previous quarter, indicating a rise of 15.6%[52]. - Total non-performing assets increased to $13,046 thousand, compared to $12,754 thousand at December 31, 2024, reflecting a growth of 2.3%[52]. Income and Revenue - Non-interest income grew to $8.9 million, with wealth management income increasing by 6.7% to $3.9 million[21]. - Net interest income rose to $29,007,000, up from $28,055,000 in the same quarter last year, reflecting a growth of 3.4%[44]. - Total interest and dividend income reached $47,538,000, compared to $45,823,000 in the prior year, indicating a growth of 3.7%[44]. - Total revenue for the quarter was $37,925 thousand, down from $38,459 thousand in the previous quarter, representing a decline of 1.4%[53]. Dividends and Shareholder Equity - The company declared a cash dividend increase to $0.32 per share, raising the annualized yield from 3.92% to 4.34%[4]. - Total shareholders' equity increased to $467 million from $458 million in Q4 2024, reflecting a solid capital position[39]. - Tangible book value per share increased to $22.47 in Q1 2025, up from $21.93 in Q4 2024, reflecting a growth of 2.46%[54]. - Common shares outstanding at the end of Q1 2025 were 15,317 thousand, an increase from 15,280 thousand in Q4 2024[54]. Efficiency and Ratios - The efficiency ratio for Q1 2025 was 62.00%, slightly higher than 59.84% in Q4 2024, indicating a decrease in operational efficiency[35]. - Return on assets for Q1 2025 was 1.02%, down from 1.09% in Q4 2024, while core return on assets remained at 1.04%[35]. - GAAP return on assets for Q1 2025 was 1.02%, down from 1.09% in Q4 2024, indicating a decrease of 6.42%[54]. - Core return on equity for Q1 2025 was 9.09%, slightly down from 9.57% in Q4 2024, a decline of 5.01%[54]. - The allowance for credit losses on loans decreased to $28.6 million, with a coverage ratio of 0.92%[13]. Deposits - Total deposits remained flat at $3.3 billion, with a 16% annualized increase in time deposits to $863 million[14]. - Total deposits increased to $3,297 million from $3,268 million in Q4 2024, reflecting a growth in non-interest bearing demand deposits[39]. - Total deposits increased by 4% year-over-year to $3,296,811,000 as of March 31, 2025[43]. - Total non-maturity deposits decreased by 1% year-over-year to $2,434,038,000[43]. - Time deposits increased by 16% year-over-year to $862,773,000[43]. Mergers and Acquisitions - The company signed a definitive merger agreement to acquire Guaranty Bancorp, Inc., enhancing its presence in northern New England[3].