BHBMEDIUM SIGNALFINANCIAL10-K

BHB expanded its balance sheet meaningfully with deposit growth driving asset expansion, though rising funding costs pressured profitability despite higher net interest income.

The bank successfully grew its deposit base and overall balance sheet by approximately 15-17%, indicating solid franchise momentum and market share gains. However, the 32.5% increase in interest expense reflects the challenging rate environment's impact on funding costs, which partially offset the benefits of asset growth and resulted in lower net income.

Comparing 2026-03-13 vs 2025-03-11View on EDGAR →
FINANCIAL ANALYSIS

BHB demonstrated strong balance sheet expansion with total assets growing to $4.7B (+14.7%) driven by deposit growth to $3.8B (+16.9%), while stockholders' equity increased proportionally to $532.5M (+16.2%). Net interest income grew modestly to $209.5M (+11%) as asset growth was partially offset by substantially higher interest expenses of $74.9M (+32.5%), reflecting rising funding costs in the current rate environment. The combination of higher expenses and growth investments resulted in net income declining to $36.9M (-15.2%), while the bank reduced capital expenditures to $4.8M (-35%), suggesting a more disciplined approach to spending.

FINANCIAL STATEMENT CHANGES
Capital Expenditure
Cash Flow
-35%
$7.4M→$4.8M

Capex reduced 35% — investment cycle winding down or capital discipline; may improve near-term free cash flow.

Interest Expense
P&L
+32.5%
$56.5M→$74.9M

Interest expense surged 32.5% — significant debt increase or rising rates materially impacting earnings.

Total Deposits
Balance Sheet
+16.9%
$3.3B→$3.8B

Deposits grew 16.9% — expanding customer base or increased trust in the institution.

Stockholders Equity
Balance Sheet
+16.2%
$458.4M→$532.5M

Equity base grew 16.2% — retained earnings accumulation or equity issuance strengthening the balance sheet.

Net Income
P&L
-15.2%
$43.5M→$36.9M

Net income declined 15.2% — review whether driven by operations, interest costs, or non-recurring items.

Total Assets
Balance Sheet
+14.7%
$4.1B→$4.7B

Asset base grew 14.7% — expansion through organic growth, acquisitions, or capital deployment.

Total Liabilities
Balance Sheet
+14.5%
$3.6B→$4.2B

Liabilities increased 14.5% — monitor debt-to-equity ratio and interest coverage.

Cash & Equivalents
Balance Sheet
+12%
$72.2M→$80.8M

Cash grew 12% — improving liquidity position supports investment and shareholder returns.

Net Interest Income
P&L
+11%
$188.7M→$209.5M

Net interest income grew 11% — benefiting from rate environment or loan book expansion.

LANGUAGE CHANGES
NEW — 2026-03-13
PRIOR — 2025-03-11
ADDED
The Registrant had 16,742,104 shares of common stock, par value $2.00 per share, outstanding as of March 6, 2026.
New Hampshire We have 30 full-service branches in operation and five wealth management offices in New Hampshire located in the Lake Sunapee, Upper Valley, Northern New Hampshire, and Merrimack Valley regions.
The regional economy is largely driven by tourism and agriculture.
Popular vacation destinations in this region include Woodstock and Brandon.
SUBSIDIARY ACTIVITIES Bar Harbor Bankshares is a legal entity separate and distinct from its first-tier bank subsidiary, Bar Harbor Bank Trust, and its second-tier subsidiaries, Bar Harbor Wealth Management ( BHWM ) and Cottage Street Corporation.
Loan interest rates and other key loan terms are affected principally by our lending policy, asset/liability strategy, loan demand, competition, and the supply of money available for lending purposes.
The average loan size in the CRE segment is approximately $1.8 million.
The weighted average loan-to-value ratio for the top 10 loans within the non-owner occupied segment was 61.0% as of December 31, 2025.
Our total commercial portfolio has a pass rating of 95%, included in the commercial portfolio are office loans of $250.3 million which have a pass rating of 86%.
For further discussion on investments see Note 3 Available-for-sale Debt Securities of the Consolidated Financial Statements.
REMOVED
The Registrant had 15,317,222 shares of common stock, par value $2.00 per share, outstanding as of March 7, 2025.
Most of these factors are difficult to anticipate and are generally beyond our control.
New Hampshire We have 21 full-service branches in operation and five wealth management offices in New Hampshire located in the Lake Sunapee, Upper Valley, and Merrimack Valley regions.
Popular vacation destinations in this region include Woodstock, Brandon, and Ludlow.
Our Code of Ethics for Senior Financial Officers, Code of Conduct and Business Ethics, Securities and Insider Trading Policy and the charters of our Board of Directors audit committee, governance committee, and compensation and human resources committee are also available on our website (www.barharbor.bank) and in print free of charge to any shareholder who requests them.
The average loan size in the CRE segment is approximately $2.1 million.
The weighted average loan-to-value ratio for the top 10 loans within the non-owner occupied segment was 60.7% as of December 31, 2024.
Our total commercial portfolio has a pass rating of 95%, included in the commercial portfolio are office loans of $247.8 million which have a pass rating of 85%.
Maturity and Sensitivity of the Loan Portfolio The following table shows contractual maturities of selected loan categories at December 31, 2024.
For further discussion on investments see Note 2 Securities Available for Sale of the Consolidated Financial Statements.
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