BHB's Q3 Net Income Plunges 27% Amid Rising Credit Losses, Acquisition Costs

Ticker: BHB · Form: 10-Q · Filed: Nov 6, 2025 · CIK: 743367

Bar Harbor Bankshares 10-Q Filing Summary
FieldDetail
CompanyBar Harbor Bankshares (BHB)
Form Type10-Q
Filed DateNov 6, 2025
Risk Levelhigh
Pages15
Reading Time18 min
Key Dollar Amounts$2.00
Sentimentbearish

Sentiment: bearish

Topics: Regional Banking, Credit Risk, Acquisition Integration, Earnings Decline, Asset Quality, Financial Performance, Loan Growth

Related Tickers: BHB

TL;DR

**BHB's Q3 earnings are a red flag, with acquisition costs and soaring credit loss provisions eating into profits despite asset growth.**

AI Summary

BAR HARBOR BANKSHARES (BHB) reported a significant decline in net income for the three and nine months ended September 30, 2025, primarily due to increased provisions for credit losses and acquisition-related expenses. Net income for the three months decreased to $8.855 million from $12.193 million in the prior year, a 27.38% drop. For the nine months, net income fell to $25.158 million from $32.545 million, a 22.69% decrease. Total assets, however, grew substantially to $4.717 billion as of September 30, 2025, up from $4.083 billion at December 31, 2024, largely driven by the acquisition of Guaranty Bancorp, Inc. Loans held for investment increased to $3.584 billion from $3.147 billion, while total deposits rose to $3.948 billion from $3.268 billion. The provision for credit losses on loans surged to $3.749 million for the three months, compared to $228 thousand in 2024, and to $4.220 million for the nine months, up from $1.102 million. Acquisition, conversion, and other expenses totaled $4.978 million for the quarter and $6.422 million for the nine-month period, significantly impacting profitability.

Why It Matters

This filing reveals a challenging quarter for BAR HARBOR BANKSHARES, with a notable decline in profitability despite asset growth driven by the Guaranty Bancorp acquisition. Investors should be concerned about the significant increase in provision for credit losses, which suggests potential asset quality deterioration or a more conservative lending outlook. The substantial acquisition and conversion expenses are a short-term drag on earnings, but their long-term impact on competitive positioning and market share in Northern New England will be crucial. Employees and customers of both BHB and Guaranty Bancorp will be watching for seamless integration and continued service quality, while the broader market will assess how regional banks navigate rising interest rates and potential credit tightening.

Risk Assessment

Risk Level: high — The risk level is high due to the significant increase in the provision for credit losses on loans, which jumped from $228 thousand in Q3 2024 to $3.749 million in Q3 2025, a 1,544% increase. Additionally, the substantial acquisition, conversion, and other expenses of $4.978 million for the quarter indicate ongoing integration challenges and cost pressures that are directly impacting net income, which fell by 27.38% year-over-year.

Analyst Insight

Investors should exercise caution and closely monitor BHB's asset quality metrics and the integration progress of the Guaranty Bancorp acquisition. Consider holding off on new investments until there's clear evidence of stabilizing credit loss provisions and a reduction in acquisition-related expenses, indicating successful integration and improved profitability.

Financial Highlights

debt To Equity
0.37
revenue
$151,584,000
operating Margin
N/A
total Assets
$4,717,252,000
total Debt
$192,185,000
net Income
$25,158,000
eps
$1.61
gross Margin
N/A
cash Position
$136,714,000
revenue Growth
+10.07%

Revenue Breakdown

SegmentRevenueGrowth
Loans$48,426,000+15.18%
Securities and other$6,355,000+15.21%
Federal Home Loan Bank stock$217,000-16.09%
Interest-earning deposits with other banks$924,000+20.78%

Key Numbers

Key Players & Entities

FAQ

What caused the decline in BAR HARBOR BANKSHARES' net income for Q3 2025?

The decline in BAR HARBOR BANKSHARES' net income for Q3 2025 was primarily caused by a significant increase in the provision for credit losses on loans, which rose to $3.749 million from $228 thousand in Q3 2024, and substantial acquisition, conversion, and other expenses totaling $4.978 million.

How did the acquisition of Guaranty Bancorp, Inc. impact BAR HARBOR BANKSHARES' financials?

The acquisition of Guaranty Bancorp, Inc. significantly increased BAR HARBOR BANKSHARES' total assets to $4.717 billion as of September 30, 2025, from $4.083 billion at December 31, 2024. It also contributed to $4.978 million in acquisition, conversion, and other expenses for Q3 2025, impacting net income.

What was the change in BAR HARBOR BANKSHARES' provision for credit losses on loans?

BAR HARBOR BANKSHARES' provision for credit losses on loans increased dramatically to $3.749 million for the three months ended September 30, 2025, compared to $228 thousand for the same period in 2024. For the nine months, it rose to $4.220 million from $1.102 million.

Did BAR HARBOR BANKSHARES experience growth in loans and deposits?

Yes, BAR HARBOR BANKSHARES experienced growth in both loans and deposits. Total loans held for investment increased to $3.584 billion as of September 30, 2025, from $3.147 billion at December 31, 2024. Total deposits also grew to $3.948 billion from $3.268 billion over the same period.

What were BAR HARBOR BANKSHARES' earnings per share for Q3 2025?

BAR HARBOR BANKSHARES reported basic earnings per share of $0.55 for the three months ended September 30, 2025, down from $0.80 in the prior year. Diluted earnings per share were $0.54, compared to $0.80 in Q3 2024.

How did non-interest income change for BAR HARBOR BANKSHARES?

Total non-interest income for BAR HARBOR BANKSHARES increased to $10.567 million for the three months ended September 30, 2025, from $9.653 million in the prior year. However, for the nine months, it decreased to $24.131 million from $27.496 million, largely due to a $4.901 million loss on available-for-sale debt securities.

What is the current outstanding common stock for BAR HARBOR BANKSHARES?

As of November 3, 2025, BAR HARBOR BANKSHARES had 16,688,573 shares of common stock, par value $2.00 per share, outstanding.

What are the key risks highlighted in BAR HARBOR BANKSHARES' filing?

Key risks highlighted include changes in general business and economic conditions, potential decline in asset quality or greater loan losses, impact of liquidity needs, effect of interest rate increases on deposit costs, and operational risks such as cybersecurity incidents and natural disasters. The failure to realize expected synergies from the Guaranty Bancorp acquisition is also a risk.

How did BAR HARBOR BANKSHARES' total liabilities change?

BAR HARBOR BANKSHARES' total liabilities increased to $4.196 billion as of September 30, 2025, from $3.625 billion at December 31, 2024. This increase was primarily driven by a rise in total deposits to $3.948 billion.

What was the trend in BAR HARBOR BANKSHARES' interest expense?

BAR HARBOR BANKSHARES' total interest expense decreased slightly to $18.963 million for the three months ended September 30, 2025, from $19.622 million in the prior year. For the nine months, it remained relatively stable at $56.287 million compared to $56.469 million in 2024.

Risk Factors

Industry Context

Bar Harbor Bankshares operates within the highly competitive U.S. regional banking sector. The industry is characterized by ongoing consolidation, increasing regulatory scrutiny, and the need to adapt to evolving customer preferences for digital banking services. Banks are also navigating a dynamic interest rate environment, which impacts net interest margins and investment portfolio valuations.

Regulatory Implications

BHB, like all financial institutions, faces stringent regulatory oversight from bodies such as the Federal Reserve and FDIC. Compliance with capital adequacy requirements, anti-money laundering laws, and consumer protection regulations is paramount. The recent acquisition may also trigger additional regulatory review or integration requirements.

What Investors Should Do

  1. Monitor Provision for Credit Losses
  2. Analyze Acquisition Synergies and Costs
  3. Evaluate Net Interest Margin Trends
  4. Assess Loan and Deposit Growth Sustainability

Key Dates

Glossary

Provision for credit losses
An expense set aside by a financial institution to cover potential losses from loans that may not be repaid. (A significant increase in this provision for BHB indicates higher perceived risk in its loan portfolio, directly impacting profitability.)
Acquisition, conversion, and other expenses
Costs incurred during the process of acquiring another company, integrating its systems, and other related operational adjustments. (These expenses are a major factor in the reported decline in net income for BHB in the current period.)
Goodwill
An intangible asset that arises when a company acquires another company for a price greater than the fair value of its identifiable net assets. (The increase in goodwill on BHB's balance sheet ($141.8M vs $119.5M) reflects the premium paid for the acquisition of Guaranty Bancorp, Inc.)
Other intangible assets
Non-physical assets that have value, such as customer lists, patents, or trademarks, often arising from acquisitions. (The substantial increase in other intangible assets ($17.0M vs $3.9M) is also a result of the recent acquisition.)
Available-for-sale debt securities
Investments in debt securities that are not classified as held-to-maturity or trading securities. They are reported at fair value on the balance sheet. (BHB holds a significant portfolio of these securities ($597.8M), which contribute to interest income but are subject to market value fluctuations.)

Year-Over-Year Comparison

Compared to the prior year's comparable periods, Bar Harbor Bankshares reported a significant decline in net income for both the three and nine months ended September 30, 2025. This was primarily driven by a substantial increase in the provision for credit losses and elevated acquisition-related expenses. Despite the profitability dip, total assets have grown considerably, largely due to the acquisition of Guaranty Bancorp, Inc., with loans and deposits also showing robust increases.

Filing Stats: 4,400 words · 18 min read · ~15 pages · Grade level 19.7 · Accepted 2025-11-06 16:23:01

Key Financial Figures

Filing Documents

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 62

Selected Financial Data

Selected Financial Data 70 Consolidated Loan and Deposit Analysis 71 Average Balances and Average Yields/Rates 72 Reconciliation of Non-GAAP Financial Measures 74 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 76 Item 4.

Controls and Procedures

Controls and Procedures 77 PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 78 Item 1A.

Risk Factors

Risk Factors 78 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 78 Item 3. Defaults Upon Senior Securities 78 Item 4. Mine Safety Disclosures 78 Item 5. Other Information 78 Item 6. Exhibits 79

Signatures

Signatures 80 Bar Harbor Bankshares conducts business operations principally through Bar Harbor Bank & Trust, which may be referred to as the "Bank" and which is a subsidiary of Bar Harbor Bankshares. Unless the context requires otherwise, references in this report to "the Company," "our," "us," and similar terms refer to Bar Harbor Bankshares and its subsidiaries, including the Bank, collectively. 2 Table of Contents CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS Certain statements contained in this Quarterly Report on Form 10-Q (this "Form 10-Q") that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. When used in this Form 10-Q the words "believe," "anticipate," "expect," "may," "will," "assume," "should," "predict," "could," "would," "intend," "targets," "estimates," "projects," "plans," and "potential," and other similar words and expressions of the future, are intended to identify such forward-looking statements, but other statements not based on historical information may also be considered forward-looking, including statements about the Company's future financial and operating results and the Company's plans, objectives, and intentions. All forward-looking statements are subject to risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of the Company to differ materially from any results, performance, or achievements expressed or implied by such forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, including, but not limited to: changes i

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

CONSOLIDATED FINANCIAL STATEMENTS

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS BAR HARBOR BANKSHARES AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share data) September 30, 2025 December 31, 2024 Assets Cash and cash equivalents: Cash and due from banks $ 42,743 $ 34,266 Interest-earning deposits with other banks 93,971 37,896 Total cash and cash equivalents 136,714 72,162 Securities: Available-for-sale debt securities 597,810 521,018 Less: Allowance for credit losses on available-for-sale debt securities — ( 568 ) Net securities 597,810 520,450 Federal Home Loan Bank stock 8,560 12,237 Loans held for sale 5,545 1,235 Total loans held for investment 3,583,716 3,147,096 Less: Allowance for credit losses ( 33,940 ) ( 28,744 ) Net loans held for investment 3,549,776 3,118,352 Premises and equipment, net 58,828 51,237 Other real estate owned — — Goodwill 141,819 119,477 Other intangible assets 16,989 3,938 Cash surrender value of bank-owned life insurance 95,554 81,858 Deferred tax assets, net 31,721 23,330 Other assets 73,936 79,051 Total assets $ 4,717,252 $ 4,083,327 Liabilities Deposits: Non-interest bearing demand $ 692,780 $ 575,649 Interest-bearing demand 1,137,362 910,191 Savings 647,428 545,816 Money market 488,633 405,758 Time 981,993 830,274 Total deposits 3,948,196 3,267,688 Borrowings: Senior 139,956 249,981 Subordinated 52,229 40,620 Total borrowings 192,185 290,601 Other liabilities 55,916 66,610 Total liabilities 4,196,297 3,624,899 Shareholders' equity Capital stock, par value $ 2.00 ; authorized 30,000,000 shares and 20,000,000 shares; issued 17,734,817 shares and 16,428,388 shares; outstanding 16,688,573 shares and 15,279,783 shares at September 30, 2025 and December 31, 2024, respectively 35,470 32,857 Additional paid-in capital 232,827 194,607 Retained earnings 307,986

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