2015 S U M M A R Y A N N UA L R E P O R T
B A R H A R B O R B A N K S H A R E S
INVESTING, GROWING, EVOLVING
Staying True to Our Culture
Bar Harbor Bank & Trust
Founded in 1887, Bar Harbor Bank & Trust (the “Bank”) is a true community bank with 15 locations from
Lubec to Topsham, Maine, offering a full range of financial products and services for families, businesses,
municipalities, and non-profit organizations. Bar Harbor Trust Services, a subsidiary of the Bank, and Bar
Harbor Financial Services, a branch of Infinex Investments, Inc., an independent third party broker, pro-
vide retirement planning, investment management, brokerage, and insurance services to a wide variety
of individual, non-profit, and municipal clients. Bar Harbor Bankshares (“BHB” or the “Company”) is the
parent company of Bar Harbor Bank & Trust (“BHBT”).
FIVE KEY BEHAVIORS
COMMUNICATION
PRACTICE communication
(Positive, Respect, Active,
Clear, Timely, Intentional,
Considerate, Empathetic)
APPRECIATION
express genuine
appreciation
BUILD
COMMUNITY
treat every person in
the Company as your
best customer
TEAMWORK
support and respect
others, working
collaboratively
for success
POSITIVE
ATTITUDE
energize your
environment—lead
with a positive attitude!
These Five Key Behaviors guide employees to live the Bar Harbor Bank & Trust brand
promise every day as they deliver service to customers. Employees are recognized and
rewarded for actively demonstrating these behaviors in their daily work.
Bar Harbor Bankshares 1 2015 SUMMARY ANNUAL REPORT
DEAR FELLOW SHAREHOLDERS,
Growing revenue, stable credit quality,
and strong capital levels are the result
of a model committed to a balance
between growth and earnings.
Curtis C. Simard, President and Chief Executive Officer
Peter Dodge, Chairman
During 2015 we remained loyal to our goals of the
previous few years, specifically focusing on evolving
our bank while preserving the culture and customer
centric approach that has driven very strong results
year in and year out. In fact, the commitment and pas-
sion of our team delivered our tenth consecutive year
of record earnings in 2015 and enabled increases to
our dividend in each quarter, raising the total to nine-
teen consecutive quarters. Along similar lines, Total
Shareholder Return (TSR) continues to become a hall-
mark of our company, appreciably exceeding the S&P
500 and several other market and peer measures over
the five-year average. This continues to confirm that we
are a positive outlier when defined by demonstration
of shareholder value. We are proud to highlight several
notable performance metrics that drove these achieve-
ments including:
• Total Asset growth of 8.3% led by average earning asset
growth of $97.3 million, which is 29% higher than last
year’s respectable increase in earning assets.
• Loan balance increases of $71.0 million, centered in
commercial loan growth of $51.1 million or 11.2%.
Growth continues to be concentrated in high quality,
well-recognized relationships that have long track records
of success with multiple product needs from the Bank.
• Stable credit quality deliverables with non-performing
loans to total loans at year-end of 0.71%.
• Total deposit growth of $84.7 million or 9.9%. We have
targeted core transaction accounts that represent low
cost funding, increasing these categories by $66.1 million
or 13.8%.
• Effective containment of expenses with an efficiency ratio
of 56.3% despite continued investment in the Company.
• Comfortable maintenance of the regulatory standards of
a “well capitalized” institution on all levels.
We believe that positive employee and customer expe-
riences naturally translate into shareholder value and
therefore are our greatest passions.
Behind the Numbers and Being Forward Thinking
Our performance has been consistent, our culture is
intact, and our Total Shareholder Return is one of the
most satisfying metrics to report. While appreciating
our success is much deserved by the very team that
worked so diligently on its creation, we are instead
focused on how to better position our future. With
Bar Harbor Bankshares 2 2015 SUMMARY ANNUAL REPORT
Growing revenue, stable credit quality,
and strong capital levels are the result
of a model committed to a balance
between growth and earnings.
various competitors in every market segment having
rehabilitated any remaining issues, there is extreme
competition for every loan and deposit. The result is
tightening margin pressure at every turn. We have
responded by reinforcing a strong team, embracing
our model of balancing growth and earnings, and con-
firming our strategic initiatives to secure our current
performance—knowing that preparation for increas-
ingly dynamic markets ahead is necessary. We have
continued to be relentless in our pursuit of correcting
blind spots and are focusing on those that we feel
pose the greatest risk. Our team is engaged to address
them not only to preserve our current position but also
to anticipate future opportunities despite potential
headwinds. In short, we are making good use of record
earnings to invest for our future.
Aggressive Sales Calling and Improved
Attention to Small Business
During 2015, we put every commercial, small business
and consumer sales officer through extensive training
based on outward client maintenance programs and
new customer prospecting. While this on the surface
may seem intuitive, our well recognized brand aware-
ness could potentially cause periodic complacency.
Ensuring our focus and developing sales skills are daily
commitments. Having the right products goes hand
in hand with team skill development. We recently
completed a year-plus-long development and installa-
tion of an improved delivery model for expediting
small business loans. The system had to be carefully
designed to ensure proper credit underwriting, but
a much improved turnaround time and more consis-
tent product was the needed outcome. Whether
through products or training, we are providing our
teams with the tools necessary to articulate the value
in the exemplary service we provide everyday.
Investment in Leadership
In planning for our future, we undertook a careful,
yet deliberate project to examine our organizational
structure from many angles. Over the past 15 months,
we have made adjustments to many divisions through-
out the Bank to better position our ongoing evolution
and forward vision, but with an unrelenting commit-
ment to our culture. In short, the prevailing question
remains obvious: how do we perform better while
preserving the environment that has been a true differ-
entiator for us? We came to the conclusion that we
needed to invest in the right personnel, both existing
leaders and catalyst recruits alike, while investing in
technology for long-term efficiency gains and to
meet growing customer expectations. This created
a clear need for leaders who:
• effectively coach and support those around them,
• live the brand consistently,
• develop more advanced process and procedures,
• are viewed as leaders in their community,
• and demonstrate the ability and willingness to take on
additional responsibility.
As a result, included in this year’s report is a section
on our newly created SVP level of leadership. This is
about recognizing key performers and making more
resources available to better support our colleagues,
our customers, and our communities while pressing
to meet our growth desires. Together we can drive
employee productivity while remaining committed
to our risk appetite and controls measures.
Investment in Risk and Credit Infrastructure
We strive to maintain a moderate-to-low risk profile.
As such, we have continued to invest in risk and credit
infrastructure. We have attracted needed personnel
Bar Harbor Bankshares 3 2015 SUMMARY ANNUAL REPORT
with experience across industries to better anticipate
future challenges in the lending community as we
have already seen responsible lending structure and
pricing come under fire. Their experience has enabled
us to create a cohesive dialogue around growth poten-
tial so that it can be energetic while being protective
and measured. We believe risk management and
responsible growth do not have to be mutually exclusive.
Investment in Products and Technology
We continue to embrace technology advancement in
our company. We are investing in our mobile platforms
and other products suites such as cash management
that is required to better capture a higher portion of
deposit “wallet” share from customers located beyond
our immediate branch footprint and as our lending
proficiency extends beyond commercial real estate
lending. The latter dovetails nicely when combined
with the experience of the credit governance and
lending teams. This also requires having an integrated
team of experienced IT professionals that can deliver
expanding platforms safely while also absorbing the
growth we seek.
Evolving a time-tested brand is something to embrace
and encourage. Always looking to advance our potential
is compulsory in today’s very competitive, highly
regulated banking industry. Our understanding of this
signals a deeply unified team whose focus is on appre-
ciating our past while relentlessly pursuing future per-
formance for our shareholders in a changing world.
On behalf of the Board of Directors and the entire Bar
Harbor Bankshares team, it is our privilege to thank you,
our fellow shareholders, for your continued confidence
and loyalty.
Curtis C. Simard
President and Chief Executive Officer
Peter Dodge
Chairman
Bar Harbor Bankshares 4 2015 SUMMARY ANNUAL REPORT
250
200
150
100
50
0
The graph below matches Bar Harbor Bankshares’ cumulative 5-Year total shareholder return on common stock
with the cumulative total returns of the NYSE MKT Composite Index, the S&P 500 Index, and the ABA Nasdaq
Community Bank Index. The graph tracks the performance of a $100 investment in our common stock and in
each index (with the reinvestment of all dividends) from 12/31/2010 to 12/31/2015.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN*
Among Bar Harbor Bankshares, the NYSE MKT Composite Index, the S&P 500 Index and ABA Nasdaq Community Bank Index
$250
200
150
100
50
0
12/10
12/11
12/12
12/13
12/14
12/15
Bar Harbor Bankshares
NYSE MKT Composite
S&P 500
ABA Nasdaq Community Bank Index
*$100 invested on12/31/10 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.
Copyright © 2016 S&P, a division of McGraw-Hill Financial. All rights reserved.
12/10
12/11
12/12
12/13
12/14
12/15
Bar Harbor Bankshares
NYSE MKT Composite
S&P 500
ABA Nasdaq Community Bank Index
100.00
100.00
100.00
100.00
107.22
104.50
102.11
94.19
124.62
110.18
118.45
109.44
153.27
118.63
156.82
154.36
190.34
120.72
178.29
161.15
210.93
107.77
180.75
176.07
The stock price performance included in this graph is not necessarily indicative of future stock
price performance.
Bar Harbor Bankshares 5 2015 SUMMARY ANNUAL REPORT
INVESTING IN OUR FACILITIES, OUR PEOPLE,
AND OUR PROCESSES
Bar Harbor Bankshares 6 2015 SUMMARY ANNUAL REPORT
INVEST
We are very excited to be reinvesting in our
headquarters! The patience and outright
enthusiasm for this project by all involved is
a material statement about the bright future
of our Company.
2015 was a year of evolutionary change at Bar Harbor
Bank & Trust. The changes were necessary to properly
support our current company and position us for
future growth in a sound and organized manner.
Guided by the strategic planning process started in
2013, quarterly the Senior Executive Team meets
to track our performance against our goals. Some
achievements made in 2015 include investments in
our facilities, our people and our processes.
In October 2015, we began much needed and exten-
sive renovations to our home office in Bar Harbor; the
branch and three floors of offices. E.L. Shea, a well-
respected local company, is the general contractor
employing many area tradespeople to do the con-
struction work, during what is otherwise known as
the “slow” season in our region.
The project includes a complete renovation of the exist-
ing 82 Main Street building to preserve the building
as well as to improve efficiency, security, privacy, and
work flow. In addition, issues of proper temperature
control, ventilation, and weatherization are being
addressed. Upgrades to technology infrastructure,
lighting, electrical, insulation, heating and cooling,
furniture, and flooring are included.
The project is being staged in sections over a
16-month period, maintaining staffing and service
levels with minimal interruption. This leaves parts of
the building free from disruption while other areas are
under construction. Phase one included renovations
of the Executive and Human Resources areas, which
were completed in December 2015. The second
phase began in January 2016 and is expected to be
completed during the second half of April. When
complete, we will be able to take much pride in the
new, fresh, clean and neat appearance of this place
we call home.
Bar Harbor Bankshares 7 2015 SUMMARY ANNUAL REPORT
WE CONTINUE TO INVEST IN OUR PEOPLE,
OUR MOST IMPORTANT ASSET
are helping to meet our objectives in evolving to
become a better bank, starting from an already
strong foundation.
Speaking of a strong foundation, in Bank Director maga-
zine’s annual list of the highest performing public
banks published in July 2015, in the $1–$5B asset size,
Bar Harbor Bank & Trust was named 52nd in the entire
nation, compared to our ranking last year as 98th. This
makes us the highest Maine-based bank on the list and
in the top four in New England! Additionally, in the May
2015 issue of American Banker magazine, Bar Harbor
Bank & Trust was named one of the Top 200 Publicly
Traded Community Banks & Thrifts in the country.
How do we perform better while preserving our cultural
environment, which is a true differentiator for us? We
continue to invest in our people, our most important
asset, as they embody the culture of the organization.
During 2015 staffing and organizational structure
changes were made to better position the Company
for future growth. Keeping as our guide the best pos-
sible employee and customer experience, there was a
clear need for leaders who can support teams charged
with successfully meeting the growing expectations
of our bank. Our new team of Senior Vice Presidents
can be found on page 12.
Many of these leaders were promoted from within
our Company while others were catalyst hires across
many disciplines. Some moved to Maine “from away,”
relocating their families to our local communities.
These individuals are key leaders, providing resources
throughout the Company to better support our
growth endeavors. These organizational alignments
Bar Harbor Bankshares 8 2015 SUMMARY ANNUAL REPORT
G R OW
Organizational alignments are helping to meet
our objectives in evolving to become a better bank,
starting from an already strong foundation.
Bar Harbor Bankshares 9 2015 SUMMARY ANNUAL REPORT
WE ARE FULLY COMMITTED TO EMBRACING TECHNOLOGY
E V O LV E
Our commitment to technology is imperative
given the expectations of our company not
only in terms of efficiency and security, but
also in achieving an improved customer and
employee experience.
Bar Harbor Bankshares 10 2015 SUMMARY ANNUAL REPORT
When it comes to evolving your bank for the future,
much of the future rests in technology. And, our com-
mitment to technology is imperative given the expec-
tations of our company not only in terms of efficiency
and security, but also in achieving an improved cus-
tomer and employee experience which drive growth
and performance.
Our Information Technology (IT) division is now under
the management of Joe Scully, SVP giving us a renewed
and expanded focus on IT, reorganizing the depart-
ment into four dedicated service groups. These teams
are talented and well equipped to tackle the growth
challenges that lie ahead. With these changes to tech-
nology infrastructure, we are clearly growing the
bank, advancing security protocols, and rolling out
new products.
During 2015 we invested in our Community Banking
team, training, and delivery channels to substantially
improve small business, consumer, and residential
lending. This included changes in process workflow
throughout the bank, improving the efficiency, con-
sistency and responsiveness of small business lending
(i.e. loans less than $250,000) within the branch system.
It also provides clarity in decision making as we seek
to grow our company, while keeping decisions local.
Newly implemented lending systems are helping us
achieve our strategic goal of streamlining loan origi-
nation and reducing our lending decision times to a
matter of minutes. This greatly improves customer
and employee experience in loans originated through
our branch network.
Moving into 2016, we will continue to invest, grow
and evolve into a better bank for our communities,
our customers, our shareholders, and ourselves.
Bar Harbor Bankshares 11 2015 SUMMARY ANNUAL REPORT
OUR NEWEST
SENIOR VICE
PRESIDENTS
Bar Harbor Bankshares 12 2015 SUMMARY ANNUAL REPORT
From left to right:
Lisa L. Parsons
SVP/Regional Market Manager
B. Edwin Wyatt , Jr.
SVP/Director of Community Banking
Joseph P. Scully
SVP/Director of Technology
& Project Management
Samuel S. McGee
SVP/Senior Relationship Manager,
Middle Market
Lisa F. Veazie
SPV/Regional Market Manager
Charles C. Thomas
SVP/Chief Credit Officer
R. Stephen Gurin, Jr.
SVP/Team Lead, Business Banking
Johanne H. Lapointe
SVP/Internal Audit
Sara H. O’Connell
SVP/Human Resources & EEO Officer
Lori L. Doak
SVP/Operations
David S. Cohen
SVP/Controller & Assistant Treasurer
Shawn R. Megathlin
SVP/Corporate Compliance
Karri A. Bailey
SVP/Managed Assets Group
Adam L. Robertson
SVP/Senior Relationship Manager,
Middle Market.
Bar Harbor Bankshares 13 2015 SUMMARY ANNUAL REPORT
Bar Harbor Bankshares
SENIOR EXECUTIVE TEAM
Bar Harbor Bankshares
BOARD OF DIRECTORS
Stephen M. Leackfeldt
Executive Vice President,
Retail Banking
Marcia T. Bender
Senior Vice President,
Retail Banking and BSA Officer
Richard B. Maltz
Executive Vice President,
Chief Risk Officer
Daina H. Hill
Lincolnville, ME
Owner of Inn at Sunrise Point
Scott G. Toothaker
Ellsworth, ME
Certified Public Accountant
Shareholder of
Melanson Heath & Co.
Peter Dodge
Blue Hill, ME
Chairman of the Board
Retired President and
Insurance Agent,
Peter Dodge Agency d/b/a Merle B.
Grindle Agency, John R. Crooker
Agency, and The Endicott Agency
Lauri E. Fernald
Mt. Desert, ME
Certified Funeral Service Practitioner
and Owner of Jordan-Fernald
Funeral Home
Martha T. Dudman
Northeast Harbor, ME
Published Author,
Former President of Dudman
Communications
Curtis C. Simard
President and Chief
Executive Officer
Marsha C. Sawyer
Executive Vice President, Human
Resources
Joseph M. Pratt
Senior Vice President, President
Bar Harbor Trust Services
Gerald Shencavitz
Executive Vice President, Chief
Operating Officer, Chief Financial
Officer and Treasurer
Gregory W. Dalton
Executive Vice President,
Business Banking
Kenneth E. Smith
Bar Harbor, ME
Owner and Innkeeper of
Manor House Inn
Curtis C. Simard
Mt. Desert, ME
President and Chief
Executive Officer of the
Company and the Bank
David B. Woodside
Bar Harbor, ME
Chief Executive Officer of
The Acadia Corporation
Matthew L. Caras
Arrowsic, ME
Owner in Leaders LLC
Constance C. Shea
Mt. Desert, ME
Real Estate Broker and Former
Owner in Lynam Real Estate
Thomas A. Colwell
Deer Isle, ME
Vice Chairman of the Board
Retired President,
Colwell Bros., Inc.
Clyde H. Lewis
Sullivan, ME
Retired Vice President and
General Manager,
Morrison Chevrolet, Inc.
Bar Harbor Bankshares 14 2015 SUMMARY ANNUAL REPORT
Bar Harbor Bankshares
FIVE-YEAR SUMMARY OF FINANCIAL DATA
The following table sets forth selected data for the last five years.
As of and for the Years Ended December 31,
(in thousands, except per share data)
Balance Sheet Data
Total assets
Total securities
Total loans
Allowance for loan losses
Total deposits
Total borrowings
Total shareholders’ equity
Average assets
Average shareholders’ equity
Results of Operations
Interest and dividend income
Interest expense
Net interest income
Provision for loan losses
Net interest income after provision for loan losses
Non-interest income
Non-interest expense
Income before income taxes
Income taxes
Net income
Per Common Share Data:
Basic earnings per share
Diluted earnings per share
Cash dividends per share
Dividend payout ratio
Selected Financial Ratios:
Return on total average assets
Return on total average equity
Tax-equivalent net interest margin
Capital Ratios:
Tier 1 leverage capital ratio
Tier 1 risk-based capital ratio
Total risk-based capital ratio
Common equity tier 1
Asset Quality Ratios:
Net charge-offs to average loans
Allowance for loan losses to total loans
Allowance for loan losses to non-performing loans
Non-performing loans to total loans
2015
2014
2013
2012
2011
$ 1,580,055
504,969
990,070
(9,439)
942,787
474,791
154,152
1,541,327
151,391
$ 1,459,320
470,525
919,024
(8,969)
858,049
447,020
146,287
1,424,209
136,672
$ 1,373,893
450,170
852,857
(8,475)
835,651
409,445
121,379
1,345,353
125,340
$
55,224
10,390
44,834
1,785
43,049
8,979
30,908
21,120
5,967
$ 53,718
9,905
43,813
1,833
41,980
7,758
29,211
20,527
5,914
$ 50,749
11,663
39,086
1,418
37,668
7,566
26,860
18,374
5,191
$ 1,302,935
418,040
815,004
(8,097)
795,012
371,567
128,046
1,252,390
125,600
$ 50,838
13,867
36,971
1,652
35,319
7,709
25,618
17,410
4,944
$ 1,167,466
381,880
729,003
(8,221)
722,890
320,283
118,250
1,151,163
111,135
$ 50,907
16,518
34,389
2,395
31,994
6,792
23,281
15,505
4,462
$
15,153
$ 14,613
$ 13,183
$ 12,466
$ 11,043
$
$
$
2.53
2.50
1.010
39.86%
0.98%
10.01%
3.19%
9.37%
15.55%
17.12%
15.55%
0.14%
0.95%
134.7%
0.71%
$
$
$
$
$
$
2.470
2.450
0.905
36.69%
$
$
$
2.240
2.220
0.833
37.28%
$
$
$
2.13
2.12
0.780
36.62%
1.03%
10.69%
3.33%
9.30%
15.60%
17.24%
N/A
0.15%
0.98%
73.0%
1.34%
0.98%
10.52%
3.15%
9.01%
14.97%
16.62%
N/A
0.12%
0.99%
95.9%
1.04%
1.00%
9.93%
3.23%
8.87%
14.15%
15.78%
N/A
0.23%
0.99%
82.1%
1.21%
1.91
1.90
0.730
38.29%
0.96%
9.94%
3.23%
9.32%
14.29%
16.06%
N/A
0.37%
1.13%
63.7%
1.77%
All share and per share amounts have been adjusted to reflect the effect of the 3-for-2 stock split (dividend) during May 2014.
Refer to the Bar Harbor Bankshares 2015 Annual Report on Form 10-K for a complete set of audited financial statements and accompanying notes.
Bar Harbor Bankshares 15 2015 SUMMARY ANNUAL REPORT
Bar Harbor Bankshares
CONSOLIDATED BALANCE SHEETS
Years Ended December 31, 2015 and 2014
(in thousands, except per share data)
Assets
Cash and cash equivalents
Securities available for sale, at fair value
Federal Home Loan Bank stock
Loans
Allowance for loan losses
Loans, net of allowance for loan losses
Premises and equipment, net
Goodwill
Bank owned life insurance
Other assets
TOTAL ASSETS
Liabilities
Deposits:
Demand and other non-interest bearing deposits
NOW accounts
Savings and money market deposits
Time deposits
Total deposits
Short-term borrowings
Long-term advances from Federal Home Loan Bank
Junior subordinated debentures
Other liabilities
TOTAL LIABILITIES
Shareholders’ equity
Capital stock, par value $2.00; authorized 20,000,000 and 10,000,000 shares; issued
6,788,407 shares at December 31, 2015 and December 31, 2014, respectively
Surplus
Retained earnings
Accumulated other comprehensive income:
Prior service cost and unamortized net actuarial losses on employee benefit plans, net
of tax of ($249) and ($251), at December 31, 2015 and December 31, 2014, respectively
Net unrealized appreciation on securities available for sale, net of tax of $2,828 and
$3,997, at December 31, 2015 and December 31, 2014, respectively
Portion of OTTI attributable to non-credit gains, net of tax of $249 and $257, at
December 31, 2015 and December 31, 2014, respectively
Net unrealized depreciation on derivative instruments, net of tax of $873 and
$389, at December 31, 2015 and December 31, 2014, respectively
Total accumulated other comprehensive income
Less: cost of 778,196 and 842,082 shares of treasury stock at December 31, 2015
and December 31, 2014, respectively
TOTAL SHAREHOLDERS’ EQUITY
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
December 31,
2015
December 31,
2014
$
9,720
504,969
21,479
990,070
(9,439)
980,631
20,674
4,935
23,747
13,900
$
9,800
470,525
21,354
919,024
(8,969)
910,055
20,518
4,935
8,141
13,992
$ 1,580,055
$ 1,459,320
$
86,577
160,394
299,087
396,729
942,787
333,909
135,882
5,000
8,325
$ 78,802
153,499
247,685
378,063
858,049
313,520
128,500
5,000
7,964
1,425,903
1,313,033
13,577
21,624
122,260
13,577
20,905
113,149
(463)
5,251
462
(1,621)
3,629
(488)
7,423
478
(722)
6,691
(6,938)
154,152
(8,035)
146,287
$ 1,580,055
$ 1,459,320
Refer to the Bar Harbor Bankshares 2015 Annual Report on Form 10-K for a complete set of audited financial statements and accompanying notes.
Bar Harbor Bankshares 16 2015 SUMMARY ANNUAL REPORT
Bar Harbor Bankshares
CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31, 2015, 2014 and 2013
(in thousands, except per share data)
Interest and dividend income:
Interest and fees on loans
Interest on securities
Dividends on FHLB stock
Total interest and dividend income
Interest expense:
Deposits
Short-term borrowings
Long-term debt
Total interest expense
Net interest income
Provision for loan losses
Net interest income after provision for loan losses
Non-interest income:
Trust and other financial services
Service charges on deposit accounts
Debit card service charges and fees
Net securities gains
Total other-than-temporary impairment (“OTTI”) losses
Non-credit portion of OTTI losses (before taxes) (1)
Net OTTI losses recognized in earnings
Other operating income
Total non-interest income
Non-interest expense:
Salaries and employee benefits
Occupancy expense
Furniture and equipment expense
Credit and debit card expenses
FDIC insurance assessments
Other operating expense
Total non-interest expense
Income before income taxes
Income taxes
Net income
Computation of Earnings Per Share:
Weighted average number of capital stock shares outstanding
Basic shares
Effect of dilutive shares issuable
Diluted shares
Per Common Share Data:
Basic Earnings Per Share
Diluted Earnings Per Share
(1) Included in other comprehensive income, net of taxes
2015
2014
2013
$ 39,303
15,343
578
$ 37,739
15,689
290
$ 37,223
13,457
69
55,224
53,718
50,749
6,097
983
3,310
10,390
44,834
1,785
43,049
3,888
892
1,694
1,334
—
—
—
1,171
8,979
17,884
2,248
2,321
452
833
7,170
30,908
21,120
5,967
5,894
667
3,344
9,905
43,813
1,833
41,980
3,976
971
1,584
403
—
—
—
824
7,758
16,836
2,143
2,166
429
699
6,938
29,211
20,527
5,914
6,616
487
4,560
11,663
39,086
1,418
37,668
3,634
1,009
1,572
676
(359)
110
(249)
924
7,566
15,227
1,968
2,005
384
696
6,580
26,860
18,374
5,191
$ 15,153
$ 14,613
$ 13,183
5,980,245
80,012
5,926,387
49,877
5,898,077
30,363
6,060,257
5,976,264
5,928,440
$ 2.53
$ 2.47
$ 2.24
$ 2.50
$ 2.45
$ 2.22
Refer to the Bar Harbor Bankshares 2015 Annual Report on Form 10-K for a complete set of audited financial statements and accompanying notes.
Bar Harbor Bankshares 17 2015 SUMMARY ANNUAL REPORT
BUSINESS STRATEGY
As a diversified financial services provider, Bar Harbor
Bankshares pursues a strategy of achieving long-term
sustainable growth, profitability, and shareholder value,
without sacrificing its soundness. The Company works
toward achieving these goals by focusing on increasing
its loan and deposit market share in downeast, midcoast
and central Maine. The Company believes one of its more
unique strengths is an understanding of the financial needs
of coastal communities and the businesses vital to Maine’s
coastal economy, namely: tourism, hospitality, retail estab-
lishments, restaurants, seasonal lodging and campgrounds,
fishing, lobstering, boat building, and marine services.
12
6
8
4
10
Operating under a community banking philosophy, the
Company’s key strategic focus is vigorous financial stew-
ardship, deploying investor capital safely, yet efficiently, for
the best possible returns. The Company strives to provide
unmatched service to its customers, while maintaining
strong asset quality and a focus toward improving operating
efficiencies. In managing its earning asset portfolios, the
Company seeks to utilize funding and capital resources
within well-defined credit, investment, interest-rate and
liquidity guidelines. In managing its balance sheet, the
Company seeks to preserve the sensitivity of net interest
income to changes in interest rates, and to enhance profit-
ability through strategies that promise sufficient reward for
understood and controlled risk. The Company is deliberate
in its efforts to maintain adequate liquidity under prevailing
and expected conditions, and strives to maintain a balanced
and appropriate mix of loans, securities, core deposits, and
borrowed funds.
60
0
2
25000
SUMMARY FINANCIAL RESULTS
50
40
20
30
For the year ended December 31, 2015, the Company reported
its tenth consecutive year of record earnings. The Company
reported net income of $15.2 million, representing an increase
of $540 thousand, or 3.7%, compared with 2014. The Company
also reported record diluted earnings per share of $2.50 for
2015, representing an increase of $0.05, or 2.0%, compared
with 2014. The Company’s return on average shareholders’
equity amounted to 10.01% in 2015, compared with 10.69% in
2014. The Company’s 2015 return on average assets amounted
to 0.98%, compared with 1.03% in 2014.
10
0
The Company’s 2015 performance featured total loan growth
of $71.0 million, led by a $51.1 million, or 11.2%, increase in the
Bank’s commercial loan portfolio. The Bank’s total deposits
increased $84.7 million in 2015, or almost 10%, reflecting one
0.4
2.0
of its strongest deposit growth rates in recent years. Despite
pressure on the net interest margin, the Bank was able to
increase net interest income by $1.1 million, while increasing
non-interest income by $1.2 million, or 15.7%, compared with
2014. Credit quality remained stable during 2015, highlighted
by a $5.3 million, or 43.0%, decline in non-performing loans
and moderately lower levels of net loan charge-off experience
compared with last year.
RETURN ON
AVERAGE ASSETS
RETURN ON
AVERAGE EQUITY
12%
10
8
6
4
2
0
1.50%
1.00
0.50
0
0.98%
’11
’12
’13
’14
’15
RESULTS OF OPERATIONS
10.01%
’11
’12
’13
’14
’15
EFFICIENCY RATIO
NON-INTEREST EXPENSE
($ in thousands)
50
40
30
60%
$30,908
Net Interest Income: Net interest income is the principal
component of the Company’s income stream and represents
the difference or spread between interest generated from
$35,000
56.3%
earning assets and the interest expense paid on deposits and
30,000
borrowed funds. Fluctuations in market interest rates, as well
as volume and mix changes in earning assets and interest
25,000
bearing liabilities, can materially impact net interest income.
20,000
For the year ended December 31, 2015, net interest income
15,000
on a tax-equivalent basis amounted to $46.8 million, com-
pared with $45.7 million in 2014, representing an increase
10,000
of $1.1 million, or 2.4%. The increase in net interest income
was principally attributed to average earning asset growth
of $97.3 million, or 7.1%, as the tax-equivalent net interest mar-
gin declined 14 basis points to 3.19% compared with 2014.
During 2015, short-term and long-term interest rates remained
at historically low levels, further pressuring the Bank’s weighted
average earning asset yields, which declined 16 basis points
to 3.89%. This decline was partially offset by a two basis
point decline in the weighted average cost of interest bearing
liabilities to 0.80%.
NON-PERFORMING
LOANS TO TOTAL LOANS
NET CHARGE-OFFS
TO AVERAGE LOANS
5,000
10
20
’13
’14
’13
’15
’14
’11
’11
’15
’12
’12
0
0
2.0%
0.4%
NET INCOME
($ in thousands)
DILUTED EARNINGS
PER SHARE
$15,153
$3.00
$2.50
’11
’12
’13
’14
’15
’11
’12
’13
’14
’15
TAX EQUIVALENT
NET INTEREST INCOME
($ in thousands)
NON-INTEREST
INCOME
($ in thousands)
$46,792
$10,000
$8,979
1.5
1.0
0.5
0.0
35000
30000
16000
12000
8000
4000
0
50000
40000
30000
20000
10000
0
1800
1500
1200
900
600
300
0
3.0
2.5
2.0
1.5
1.0
0.5
0.0
10000
8000
6000
4000
2000
0
1200
1000
800
600
400
200
0
$16,000
12,000
8,000
4,000
0
$50,000
40,000
30,000
20,000
10,000
0
$1,800
1,500
1,200
900
600
300
0
2.50
2.00
1.50
1.00
0.50
0
8,000
6,000
4,000
2,000
0
$1,200
1,000
800
600
400
200
0
’11
’12
’13
’14
’15
’11
’12
’13
’14
’15
ASSETS
($ in millions)
LOANS
($ in millions)
$1,580
$990
20000
15000
10000
5000
0
1.5
1.0
0.5
0.0
0.3
0.2
0.1
0.0
1.5
Bar Harbor Bankshares 18 2015 SUMMARY ANNUAL REPORT
1.0
0.71%
0.5
0
0.3
0.2
0.1
0
0.14%
’11
’12
’13
’14
’15
’11
’12
’13
’14
’15
’11
’12
’13
’14
’15
’11
’12
’13
’14
’15
16000
12000
8000
4000
0
50000
40000
30000
20000
10000
0
1800
1500
1200
900
600
300
0
3.0
2.5
2.0
1.5
1.0
0.5
0.0
10000
8000
6000
4000
2000
0
1200
1000
800
600
400
200
0
NET INCOME
($ in thousands)
DILUTED EARNINGS
PER SHARE
$15,153
$3.00
$2.50
’11
’12
’13
’14
’15
’11
’13
’14
’15
TAX EQUIVALENT
8000
NET INTEREST INCOME
($ in thousands)
NON-INTEREST
1.5
INCOME
($ in thousands)
$50,000
4000
$46,792
$10,000
$8,979
’11
’12
’13
’14
’15
’11
’12
’13
’14
’15
ASSETS
($ in millions)
20000
$1,800
10000
LOANS
($ in millions)
4000
$1,580
$990
’11
’12
’13
’14
’15
’11
’12
’13
’14
’15
2.50
2.00
1.50
1.00
0.50
0
8,000
6,000
4,000
2,000
0
$1,200
1,000
800
600
400
200
0
3.0
2.5
2.0
1.5
1.0
3.0
0.5
’12
2.5
0.0
2.0
1.0
0.5
0.0
10000
8000
6000
4000
2000
10000
0
8000
6000
2000
1200
0
1000
800
600
400
1200
200
1000
0
800
600
400
200
0
$16,000
12,000
8,000
4,000
0
16000
12000
8000
4000
16000
0
12000
40,000
30,000
20,000
10,000
0
1,500
1,200
900
600
300
0
50000
0
40000
30000
20000
10000
50000
0
40000
30000
1800
0
1500
1200
900
600
1800
300
1500
0
1200
900
600
300
0
NET INCOME
($ in thousands)
DILUTED EARNINGS
PER SHARE
1.5
$16,000
1.0
12,000
$15,153
0.5
0.0
8,000
NET INCOME
($ in thousands)
4,000
$16,000
0
12,000
$15,153
’11
’12
’13
’14
’15
12
$3.00
10
2.50
8
6
4
2
2.00
1.50
1.00
$3.00
0.50
0
2.50
0
2.00
$2.50
DILUTED EARNINGS
PER SHARE
’11
’12
’13
’14
$2.50
’15
1.50
8,000
4,000
TAX EQUIVALENT
NET INTEREST INCOME
($ in thousands)
Non-interest Income: In addition to net interest income,
non-interest income is a significant source of revenue for the
Company and an important factor in its results of operations.
Non-interest income is principally derived from financial serv-
ices including trust, investment management and brokerage
$50,000
$8,979
activities, as well as service charges on deposit accounts,
’15
debit card processing fees, net securities gains, and a variety
of other product and service fees.
NON-INTEREST
INCOME
($ in thousands)
$46,792
0.50
$10,000
40,000
8,000
1.00
’14
’12
’11
’13
’14
’11
’12
’15
’13
0
0
40
50
60
35000
30000
25000
20000
30,000
30
6,000
15000
10000
20,000
TAX EQUIVALENT
NET INTEREST INCOME
($ in thousands)
$46,792
’11
’12
’13
’14
’15
5000
10,000
$50,000
0
0
40,000
30,000
20
10
0
4,000
NON-INTEREST
INCOME
($ in thousands)
$8,979
’11
’12
’13
’14
’15
2,000
$10,000
0
8,000
6,000
20,000
ASSETS
($ in millions)
4,000
LOANS
($ in millions)
10,000
2.0
$1,800
0
1.5
1,500
’11
’12
’13
’14
$1,580
’15
2,000
0.4
$1,200
0
0.3
1,000
’11
’12
’13
’14
’15
$990
1.0
0.5
0.2
600
600
900
ASSETS
($ in millions)
For the year ended December 31, 2015, total non-interest
income amounted to $9.0 million, representing an increase
of $1.2 million, or 15.7%, compared with 2014. The increase in
non-interest income was largely attributed to a $931 thousand
increase in realized securities gains compared with 2014. Other
$1,800
300
operating income amounted to $1.2 million in 2015 represent-
$990
ing an increase of $347 thousand, or 42.1%, compared with
’15
2015, principally reflecting income associated with the Bank’s
LOANS
($ in millions)
$1,580
$1,200
200
1,000
0
1,500
0
400
’14
’11
’12
’11
’12
’13
’14
’13
’15
0.1
0.0
0.0
RETURN ON
AVERAGE ASSETS
RETURN ON
AVERAGE EQUITY
1.50%
purchase of additional Bank Owned Life Insurance in the first
quarter of this year. Income generated from debit card service
charges and fees amounted to $1.7 million in 2015, represent-
ing an increase of $110 thousand, or 6.9%, compared with
10.01%
2014, largely reflecting continued growth of the Bank’s retail
deposit base and continued success with a program that
0.98%
offers rewards for certain debit card transactions.
12%
1.00
10
8
1.5
10
12
1.0
8
6
0.5
6
0.50
Partially offsetting the foregoing increases in non-interest
income was a $79 thousand, or 8.1%, decline in service charges
on deposits compared with 2014, principally reflecting lower
levels of fee-based customer overdraft activity. Revenue from
trust and other financial services amounted to $3.9 million
in 2015, representing a decline of $88 thousand, or 2.2%,
compared with 2014, largely reflecting lower volumes of retail
brokerage activity.
’12
10
0
’12
’13
’14
’15
’11
’14
’15
’11
’13
12
2
4
0
0
2
1.5
0.0
4
1.0
8
NON-INTEREST EXPENSE
($ in thousands)
EFFICIENCY RATIO
6
$35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
$30,908
0.5
35000
0.0
30000
25000
20000
15000
10000
35000
5000
’13
’14
’15
’11
30000
’12
0
25000
60%
50
40
30
20
10
0
56.3%
4
2
0
60
50
40
30
20
60
10
’11
’12
’13
’14
’15
50
0
40
30
20
5000
20000
10000
15000
2.0%
NET CHARGE-OFFS
TO AVERAGE LOANS
NON-PERFORMING
LOANS TO TOTAL LOANS
Non-interest Expense: For the year ended December 31,
2015, total non-interest expense amounted to $30.9 million,
representing an increase of $1.7 million, or 5.8%, compared
with 2014. The increase in non-interest expense was largely
attributed to a $1.0 million, or 6.2%, increase in salaries and
employee benefits. The increase in salaries and employee
benefits was attributed to a variety of factors including nor-
mal increases in base salaries and higher levels of employee
health insurance, higher levels of employee incentive and
equity award compensation, as well as increases in staffing
levels and strategic changes in staffing mix.
0.4%
0.2
0.3
1.0
1.5
0.3
0.4
1.5
2.0
10
0
0
1.0
0.2
0.71%
0.14%
2.0
0.5
0.1
0.5
Total other operating expenses amounted to $7.2 million
in 2015, representing an increase of $232 thousand, or
3.3%, compared with 2014. This increase was attributed to
a variety of expense categories, the most significant of
’15
which included fees for professional services and share-
holder related expenses. Furniture and equipment expenses
’11
’12
’13
’14
’15
’11
’13
’14
’12
0
0
0.0
0.1
0.0
0.3
0.4
1.5
1,200
1,200
900
600
300
0
800
800
600
400
200
0
Bar Harbor Bankshares 19 2015 SUMMARY ANNUAL REPORT
1.0
0.5
0.0
0.2
0.1
0.0
RETURN ON
AVERAGE ASSETS
RETURN ON
AVERAGE EQUITY
1.50%
1.00
0.50
1.50%
0
1.00
RETURN ON
AVERAGE ASSETS
RETURN ON
AVERAGE EQUITY
’11
’12
’13
’14
’15
’11
’12
’13
’14
’15
0.98%
0.98%
10.01%
10.01%
NON-INTEREST EXPENSE
EFFICIENCY RATIO
0.50
($ in thousands)
’11
’12
’13
’14
’15
’11
’12
’13
’14
’15
$30,908
56.3%
NON-INTEREST EXPENSE
EFFICIENCY RATIO
($ in thousands)
$30,908
60%
10
56.3%
’11
’12
’13
’14
’15
’11
’12
’13
’14
’15
$35,000
0
30,000
25,000
20,000
15,000
10,000
$35,000
5,000
30,000
0
25,000
20,000
15,000
NON-PERFORMING
10,000
LOANS TO TOTAL LOANS
20
NET CHARGE-OFFS
TO AVERAGE LOANS
’11
’12
’13
’14
’15
’11
’12
’13
’14
’15
NON-PERFORMING
LOANS TO TOTAL LOANS
0.71%
NET CHARGE-OFFS
TO AVERAGE LOANS
0.14%
’11
’12
’13
’14
’15
’11
’12
’13
’14
’15
0.71%
0.14%
5,000
2.0%
0
1.5
1.0
0.5
2.0%
0
1.5
1.0
0.5
0
12%
10
12%
2
10
0
8
6
4
8
6
4
2
0
50
40
30
20
50
0
40
30
60%
10
0.4%
0
0.3
0.2
0.1
0.4%
0
0.3
0.2
0.1
0
’11
’12
’13
’14
’15
’11
’12
’13
’14
’15
’11
’12
’13
’14
’15
’11
’12
’13
’14
’15
$16,000
16000
$15,153
$3.00
$2.50
0
’11
0
’12
’13
’14
’15
’11
0.0
’12
’13
’14
’15
TAX EQUIVALENT
NET INTEREST INCOME
($ in thousands)
NON-INTEREST
INCOME
($ in thousands)
$50,000
50000
$46,792
$10,000
10000
$8,979
1.5
1.0
0.5
0.0
35000
30000
25000
20000
15000
10000
5000
0
16000
12000
8000
4000
0
50000
40000
30000
20000
10000
0
1800
1500
1200
900
600
300
0
3.0
2.5
2.0
1.5
1.0
0.5
0.0
10000
8000
6000
4000
2000
0
1200
1000
800
600
400
200
0
3.0
2.5
2.0
1.5
1.0
0.5
8000
6000
4000
2000
1200
1000
800
600
400
200
2.50
2.00
1.50
1.00
0.50
0
8,000
6,000
4,000
2,000
0
$1,200
1,000
800
600
400
200
0
0
’11
0
’12
’13
’14
’15
’11
0
’12
’13
’14
’15
$1,580
$990
’11
0
’12
’13
’14
’15
’11
0
’12
’13
’14
’15
12,000
12000
8,000
8000
4,000
4000
40,000
40000
30,000
30000
20,000
20000
10,000
10000
1800
1500
1200
900
600
300
$1,800
1,500
1,200
900
600
300
0
NET INCOME
($ in thousands)
DILUTED EARNINGS
PER SHARE
NET INCOME
($ in thousands)
DILUTED EARNINGS
PER SHARE
RETURN ON
AVERAGE ASSETS
RETURN ON
AVERAGE EQUITY
RETURN ON
AVERAGE ASSETS
RETURN ON
AVERAGE EQUITY
amounted to $2.3 million in 2015, up $155 thousand, or 7.2%,
$16,000
compared with 2014. These increases were largely attributed
$2.50
to a variety of technology upgrades and certain new tech-
nology systems and applications.
12,000
$15,153
$3.00
2.50
12
10
2.00
8
6
4
1.50
1.00
Efficiency Ratio: The Company’s efficiency ratio, or non-interest
operating expenses divided by the sum of tax-equivalent
8,000
net interest income and non-interest income other than net
securities gains and other-than-temporary impairments,
4,000
measures the relationship of operating expenses to revenues.
Low efficiency ratios are typically a key factor for high per-
forming financial institutions. For the year ended December
31, 2015, the Company’s efficiency ratio amounted to 56.3%,
compared with 54.7% in 2014. These ratios compared favor-
ably to peer and industry averages.
0.50
’15
’14
’12
’11
’15
’11
’13
’12
’13
’14
0
0
2
0
$46,792
NON-INTEREST
INCOME
($ in thousands)
TAX EQUIVALENT
NET INTEREST INCOME
($ in thousands)
Income Taxes: For the year ended December 31, 2015, total
income taxes amounted to $6.0 million, representing an
increase of $53 thousand, or 0.9%, compared with 2014. The
$50,000
Company’s effective tax rate amounted to 28.3% in 2015,
$8,979
compared with 28.8% in 2014. Fluctuations in the Company’s
40,000
effective tax rate are generally attributed to changes in the
relationship between non-taxable income and non-deductible
30,000
expense, and income before income taxes, during any given
reporting period.
20,000
$10,000
6,000
8,000
40
60
50
30
4,000
20
2,000
FINANCIAL CONDITION
10,000
Assets: At December 31, 2015, the Company’s total assets
stood at $1.58 billion, representing an increase of $120.7 mil-
lion, or 8.3%, compared with year end 2014. The increase in
total assets was led by loan and securities growth and, to a
lesser extent, the purchase of Bank Owned Life Insurance.
’15
’14
’11
’15
’13
’12
’11
’12
’14
’13
0
0
10
0
10
12
1.5
1.0
10
1.00
12%
0.98%
Loans: Consumer loans, which principally consisted of resi-
1.50%
dential real estate mortgage loans and home equity loans,
10.01%
comprised 47.3% of the Bank’s total loan portfolio at December
31, 2015. The Bank also serves the small business market
throughout downeast, midcoast and central Maine. It offers
business loans to individuals, partnerships, corporations, and
other business entities for capital construction, real estate
purchases, working capital, real estate development, and a
broad range of other business purposes. At December 31,
2015, commercial business loans represented 51.2% of the
Bank’s total loan portfolio.
’13
0.50
0
’12
’14
’15
’13
’15
’11
’11
’12
’14
0
0
2
4
6
8
0.0
0.5
8
2
6
4
60
35000
30000
60%
$30,908
EFFICIENCY RATIO
NON-INTEREST EXPENSE
($ in thousands)
Total loans ended the year at $990.1 million, up $71.0 million,
or 7.7%, compared with December 31, 2014. At year end, the
Bank’s commercial loan portfolio stood at $506.8 million,
representing an increase of $51.1 million, or 11.2%, compared
with December 31, 2014. Consumer loans, which principally
consist of residential real estate mortgages, ended the year
at $467.9 million, up $21.3 million, or 4.8%, compared with
$35,000
56.3%
December 31, 2014.
30,000
Credit Quality: The overall credit quality of the Bank’s loan
25,000
portfolio remained stable during 2015, highlighted by a
meaningful decline in non-performing loans. Total non-
20,000
performing loans ended the year at $7.0 million, compared
15,000
with $12.3 million at December 31, 2014, representing a
decline of $5.3 million, or 43.0%. Total non-performing loans
10,000
expressed as a percentage of total loans ended the year at
5,000
0.71%, down from 1.34% at year-end 2014. Similarly, the allow-
ance for loan losses expressed as a ratio to non-performing
loans ended the year at 134.7%, up from 73.0% at December
31, 2014.
0
’12
0
’12
10
20
30
40
50
’11
’13
’15
’14
’14
’13
’15
’11
15000
25000
20000
10000
5000
0
0
10
30
40
20
50
1.50%
1.00
0.50
0
$35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
10.01%
0.98%
’11
’12
’13
’14
’15
’11
’12
’13
’14
’15
NON-INTEREST EXPENSE
EFFICIENCY RATIO
($ in thousands)
$30,908
56.3%
’11
’12
’13
’14
’15
’11
’12
’13
’14
’15
ASSETS
($ in millions)
LOANS
($ in millions)
ASSETS
($ in millions)
LOANS
($ in millions)
NON-PERFORMING
LOANS TO TOTAL LOANS
NET CHARGE-OFFS
TO AVERAGE LOANS
NON-PERFORMING
LOANS TO TOTAL LOANS
NET CHARGE-OFFS
TO AVERAGE LOANS
2.0
$1,800
1.5
1,500
1,200
1.0
900
600
300
0
0.5
0.0
$1,580
’11
’12
’13
’14
’15
0.4
$1,200
0.3
1,000
800
0.2
600
0.1
400
200
0.0
0
$990
’11
’12
’13
’14
’15
2.0%
1.5
1.0
0.5
0
2.0
1.5
1.0
0.5
0.71%
’11
0.0
’12
’13
’14
’15
0.4%
0.3
0.2
0.1
0
0.4
0.3
0.2
0.1
0.14%
’11
0.0
’12
’13
’14
’15
2.0%
1.5
1.0
0.5
0
0.71%
0.14%
’11
’12
’13
’14
’15
’11
’12
’13
’14
’15
Bar Harbor Bankshares 20 2015 SUMMARY ANNUAL REPORT
12%
10
8
6
4
2
0
60%
50
40
30
20
10
0
0.4%
0.3
0.2
0.1
0
2500
2000
1500
1000
500
0
PROVISION FOR
LOAN LOSSES
($ in thousands)
ALLOWANCE FOR
LOAN LOSSES
($ in thousands)
$10,000
$9,439
$1,785
8,000
6,000
4,000
2,000
0
’11
’12
’13
’14
’15
’11
’12
’13
’14
’15
600
500
400
300
200
100
0
10000
8000
6000
4000
2000
0
1.25
1.00
0.75
0.50
0.25
0.00
$2,500
2,000
1,500
1,000
500
0
$1.25
1.00
0.75
0.50
0.25
SHAREHOLDER
DIVIDENDS
$1.01
0
2500
’11
’12
’13
’14
’15
2000
1500
1000
500
0
10000
8000
6000
4000
2000
0
1.25
1.00
0.75
0.50
0.25
0.00
Total net loan charge-offs amounted to $1.3 million in 2015,
or net charge-offs to average loans outstanding of 0.14%,
compared with $1.3 million, or 0.15%, in 2014. The Bank
recorded a provision for loan losses of $1.8 million in 2015,
representing a decline of $48 thousand, or 2.6%, compared
with 2014. At December 31, 2015, the Bank’s allowance for
loan losses stood at $9.4 million, representing an increase of
$470 thousand, or 5.2%, compared with year end 2014.
1000
800
600
400
200
Investment Securities: During 2015 the securities portfolio
continued to serve as a key source of earning assets and
liquidity for the Bank. Bank management considers securities
as a relatively attractive means to effectively leverage the
Bank’s strong capital position, as securities are typically
assigned a significantly lower risk weighting for the purpose
of calculating the Bank’s and the Company’s risk-based capi-
tal ratios. The overall objectives of the Bank’s strategy for the
securities portfolio include maintaining appropriate liquidity
reserves, diversifying earning assets, managing interest rate
risk, leveraging the Bank’s strong capital position, generating
acceptable levels of net interest income and, when appropri-
ate, generating realized gains on the sale of securities.
0
At December 31, 2015, total investment securities amounted
to $505.0 million, representing an increase of $34.4 million, or
7.3%, compared with year end 2014. The securities portfolio
is comprised of mortgage-backed securities issued by U.S.
Government agencies, U.S. Government-sponsored enterprises
and, to a much lesser extent, other non-agency, private-label
issuers. The securities portfolio also includes tax-exempt obli-
gations of states and political subdivisions thereof.
PROVISION FOR
LOAN LOSSES
($ in thousands)
ALLOWANCE FOR
LOAN LOSSES
($ in thousands)
$10,000
$9,439
$1,785
’11
’12
’13
’14
’15
8,000
6,000
4,000
2,000
0
’11
’12
’13
’14
’15
$2,500
2,000
1,500
1,000
500
0
SECURITIES
($ in millions)
DEPOSITS
($ in millions)
$1,000
$943
$505
800
600
400
200
0
’11
’12
’13
’14
’15
’11
’12
’13
’14
’15
$600
500
400
300
200
100
0
Deposits: During 2015, the most significant funding source
for the Bank’s earning assets continued to be retail deposits,
gathered through its network of fifteen banking offices
throughout downeast, midcoast and central Maine.
Total deposits ended the year at $942.8 million, up $84.7
million, or 9.9%, compared with December 31, 2014. Total
deposit transaction accounts increased $66.1 million, or
13.8%, while time deposits were up $18.7 million, or 4.9%,
compared with December 31, 2014.
Borrowings: Borrowed funds principally consist of advances
from the Federal Home Loan Bank of Boston. The Bank uti-
lizes borrowed funds in leveraging its strong capital position
and supporting its earning asset portfolios. Borrowed funds
also provide a means to help manage balance sheet interest
rate risk, given the Bank’s ability to select desired amounts,
terms and maturities on a daily basis. At December 31, 2015,
total borrowings stood at $474.8 million, representing an
increase of $27.8 million, or 6.2%, compared with December
31, 2014. The increase in borrowings was utilized to help
support the Bank’s 2015 earning asset growth; particularly
the growth in the Bank’s leveraged securities portfolio.
1000
600
500
800
400
300
600
200
Capital: Consistent with its long-term strategy of operating
a sound and profitable organization, at December 31, 2015,
the Company and the Bank continued to exceed regulatory
requirements for “well-capitalized” financial institutions.
Company management considers this to be vital in promot-
ing depositor and investor confidence and providing a solid
foundation for future growth.
100
200
400
0
0
Bar Harbor Bankshares 21 2015 SUMMARY ANNUAL REPORT
SHAREHOLDER
DIVIDENDS
$1.01
’11
’12
’13
’14
’15
$1.25
1.00
0.75
0.50
0.25
0
SECURITIES
($ in millions)
DEPOSITS
($ in millions)
$1,000
$943
$505
$600
500
400
300
200
100
0
800
600
400
200
0
’11
’12
’13
’14
’15
’11
’12
’13
’14
’15
600
500
400
300
200
100
0
1000
800
600
400
200
0
SECURITIES
($ in millions)
DEPOSITS
($ in millions)
$1,000
$943
$505
$600
500
400
300
200
100
0
800
600
400
200
0
2500
10000
$2,500
$10,000
$9,439
PROVISION FOR
LOAN LOSSES
($ in thousands)
ALLOWANCE FOR
LOAN LOSSES
($ in thousands)
2000
8000
1500
Under the capital adequacy guidelines administered by the
Bank’s principal regulators, “well-capitalized” institutions are
those with Common Equity Tier I, Tier I Leverage, Tier I Risk-
based, and Total Risk-based ratios of at least 6.5%, 5%, 8%
and 10%, respectively. At December 31, 2015, the Company’s
Common Equity Tier I, Tier I Leverage, Tier I Risk-based, and
Total Risk-based capital ratios were 15.55%, 9.37%, 15.55% and
17.12%, respectively.
1000
6000
4000
2000
500
0
0
Three-for-Two Stock Split: On April 22, 2014, the Company’s
Board of Directors declared a three-for-two split of its com-
mon stock, payable as a large stock dividend, which was paid
on May 19, 2014 (the “payment date”) to all stockholders of
record at the close of business on May 5, 2014. As of April 22,
2014, the Company had 3,944,290 shares of common stock
outstanding. After the stock split effectuated as a large stock
dividend, the number of shares of Company common stock
outstanding increased to 5,916,435. All previously reported
share and per share data included in public filings subse-
quent to the payment date has been restated to reflect the
retroactive effect of this three-for-two stock split.
1.25
1.00
0.75
0.50
0.25
0.00
2,000
8,000
1,500
$1,785
Shareholder Dividends: During 2015, the Company paid regu-
lar cash dividends on its common stock in the aggregate
amount of $6.04 million, compared with $5.36 million in 2014.
The Company’s 2015 dividend payout ratio amounted to
39.9%, compared with 36.7% in 2014. The total regular cash
dividends paid in 2015 amounted to $1.01 per share of com-
mon stock, compared with $0.905 per share in 2014, repre-
senting an increase of 0.105 cents per share, or 11.6%.
0
6,000
4,000
1,000
2,000
500
0
’12
’15
’13
’14
’11
’11
The Company’s Board of Directors declared a first quarter
2016 regular cash dividend of 26.5 cents per share of com-
mon stock, representing an increase of 2.0 cents, or 8.2%,
compared with the first quarter of 2015. Based on the year-
end 2015 price of BHB’s common stock of $34.42 per share,
the dividend yield amounted to 3.08%.
’12
’13
’14
’15
’11
’12
’13
’14
’15
’11
’12
’13
’14
’15
SHAREHOLDER
DIVIDENDS
$1.25
1.00
0.75
0.50
0.25
0
$1.01
’11
’12
’13
’14
’15
Bar Harbor Bankshares 22 2015 SUMMARY ANNUAL REPORT
Bar Harbor Bankshares
MANAGEMENT AND STAFF
SENIOR
EXECUTIVE TEAM
Simard, Curtis C.**
President & Chief
Executive Officer
Shencavitz, Gerald**
Executive Vice President,
Chief Financial Officer &
Treasurer
Bender, Marcia T.
Senior Vice President,
Retail Banking and
BSA Officer
Dalton, Gregory W.*
Executive Vice President,
Business Banking
Leackfeldt, Stephen M.*
Executive Vice President,
Retail Banking
Maltz, Richard B.*
Executive Vice President,
Chief Risk Officer
Pratt, Joseph M.
Senior Vice President,
President Bar Harbor
Trust Services
Sawyer, Marsha C.
Executive Vice President,
Human Resources
EMPLOYEES
AS OF 3/7/16
Abbott, Jennifer C.
Ahern, Mark P.
Albee, Susan L.
Allen, Deena M.
Allen, Faye M.
Allen, Holly M.
Allen, Maryann G.
Alley, Stacie J.
Allisot, Allison L.
Anderson, Judi L.
Andrews, Holly M.
Archer, Holly J.
Austin, Vicki J.
Bacha, Alexandra T.
Bailey, Karri A.
Bannister, Michelle R.
Barton, Hannah R.
Bates-Mitchell, Kristi L.
Beal, Charleen L.
Beal, Jenna M.
Beyer, Leslie M.
Billings, Leah M.
Blackburn, Sarah E.
Blackett, Steven W.
Blake, Heidi L.
Boudreau, Alain R.
Bowden, Melanie J.
Bowker, Rose A.
Boynton, Lori C.
Brackett, Heather R.
Brady, Penny S.
Brooks, April N.
Brown, Chelsea E.
Bryer, Katy A.
Caouette, Marian R.
Carter, Hillary A.
Catanese, Sarah J.
Chapman, Jason R.
Charland, Jeffrey D.
Cohen, David S.
Colson, Theresa L.
Colwell, Brenda B.
Condon, Brenda J.
Conner, Erin S.
Cote, Leslie A.
Crippen, Melinda A.
Crisafulli, Paul J.
Curtis, Michelle E.
Darcy, Larissa V.
Davis, Kristyn L.
Davis, Sharon J.
Doak, Lori L.
Dow, Adam T.
Dow, Candice M.
Dunbar, Ruth K.
Dupuy, Mia B.
Eaton, Audrey H.
Eldridge, Patricia L.
Emerson, Rebecca H.
Farnsworth, Pamela J.
Forni, Morgan K.
Foskett, Amy N.
Foster, Wren M.
Fournier-Decoste,
Katheryn R.
Frederick, Marina P.
Frost II, Philip L.
Fuller, Judith W.
Schaub Jr., Mark Y.
Schmidt, Shauna L.
Scott-Henderson, Debra L.
Scully, Joseph P.
Shields, Scott K.
Short, Zachary M.
Shults, Brittaney D.
Sinclair, Jacklyn M.
Small, Sarah W.
Somes, Andrew L.
Stanley, Kristy L.
Stevens, Lottie B.
Stover, Teri A.
Strout, Hilary E.
Swanberg, Peter M.
Swett, Andrea D.
Terry, Mindy K.
Testa, John E.
Thibodeau, Mary E.
Thomas, Charles C.
Thompson, Dianne B.
Tower, Betty B.
Tracy, Terry E.
Tunney, Timothy F.
Urquhart, Kirstie A.
Veazie, Lisa F.
Wallace, Allyson M.
Ward, Jennifer D.
Warren, Jody C.
Webster, Paula R.
Weeks, Jessica R.
Wesseling, Xin L.
White, Stefanie M.
Wiberg, Katie G.
Williams II, John M.
Winger, Mikhayla R.
Wood, Crystal N.
Wooster, Timothy J.
Wray, Natalie C.
Wright, Kim W.
Wyatt Jr., Bruce E.
Young, Peggy L.
Zeugner, Leita K.
Zimmerman, Julie B.
Gatcomb, Becky L.
Gatcomb, Dena M.
Geel, Faye A.
Giordano, Mark P.
Granger, Lisa L.
Gray, Marjorie E.
Gray, Roger V.
Gray, Shelley E.
Griffin, Susanne M.
Gurin Jr., R. Stephen
Haley, Andrew J.
Hall, Kelli M.
Hamilton, Kirsten M.
Hamilton, Ronald L.
Hanscom, Betsy B.
Hawes, Bethany A.
Hays, Mary D.
Hennigan, Robin L.
Hepburn, Barbara F.
Hinckley, Melissa S.
Hinkel, Nicole S.
Horner, Lara K.
Howie, Jeanette L.
Huffman, Lynn L.
Hunt, Marianne
Jacobs, Page E.
Jameson, Melissa A.
Jipson, Bruce W.
Jordan, Krystal E.
Kane, Maureen E.
Kelliher, Keisha L.
Kinghorn, Dennis M.
Kneser, Andrew P.
Lacasse, James W.
Lambert, Jane E.
Lapointe, Johanne M.
Lawson, Jessica K.
Leblanc, Bonnie S.
Lee, Nichole J.
Lewis, Stephanie M.
Lindsey-Mercier, Danielle M.
Look, Carissa A.
Lord, Maureen T.
Lovely, Norma K.
Luce, Wendy J.
MacLeod, Virginia L.
Maffucci, Deborah A.
Mahoney, Sharon I.
Malloy, Julie C.
Mansfield, Marcia L.
Marchetti, Brandy M.
Martin, Elena M.
Matthews, Ashley S.
Maynard, Colleen E.
McConomy, Amy G.
McElyea, Jeremiah S.
McGee, Samuel S.
McPhail, Robin J.
Megathlin, Shawn R.
Meo, Matthew F.
Miller Jr., Timothy J.
Millett, Marcia L.
Mills-Stevens, Donna M.
Mitchell, Sonya L.
Mitchell-Dow, Debra S.
Mooney, Dylan A.
Mora, Angela R.
Morissette, Paul E.
Murphy, Lisa M.
Nacey, Victoria A.
Nason, Kimberly J.
Newenham, Judith L.
Nguyen, My T.
Nicholas, Derek G.
Norton, Jennifer I.
Norwood, Nichole D.
O’Connell, Sara H.
Ohmeis, Claire C.
Orcutt, Alexandra
Orio, Alexsandra S.
Parker, Andrea L.
Parlee, Deborah I.
Parsons, Lisa L.
Patton, Ebony A.
Pellett, Christine A.
Pendleton, Candy A.
Planchart, Catherine M.
Poland, Bonnie A.
Pye, Carol J.
Radel, Joshua A.
Redlevske, Shelley R.
Redman, Julie A.
Reynolds, Jordan M.
Richards, Judy A.
Riitano, Zachary J.
Robbins, Amanda L.
Robertson, Adam L.
Robinson, Natasha A.
Rumill, April J.
Saunders, Jennifer M.
Savage, Melissa A.
Sawyer, Amanda L.
Sawyer, Chelsea M.
Schaefer, Frank J.
*Named Executive Officers
**Bar Harbor Bankshares Management and Named Executive Officers
Bar Harbor Bankshares 23 2015 SUMMARY ANNUAL REPORT
15 branches
3 service offices
223 employees
BUSINESS BANKING,
TRUST & FINANCIAL
SERVICES OFFICES
Bangor
One Cumberland Place
Suite 100
Bangor, ME 04401
Ellsworth
135 High Street
Ellsworth, ME 04605
Breakwater Marketplace
91 Camden Street
Rockland, ME 04841
Bar Harbor Bankshares
LOCATIONS
CORPORATE OFFICE
Bar Harbor
82 Main Street
Bar Harbor, ME 04609
Augusta
227 Water Street
Augusta, ME 04330
Blue Hill
21 Main Street
Blue Hill, ME 04614
Deer Isle
25 Church Street
Deer Isle, ME 04627
Ellsworth
125 High Street
Ellsworth, ME 04605
Lubec
68 Washington Street
Lubec, ME 04652
Machias
41 Main Street
Machias, ME 04654
Milbridge
2 Bridge Street
Milbridge, ME 04658
Northeast Harbor
111 Main Street
Northeast Harbor, ME
04662
Rockland
245 Camden Street
Rockland, ME 04841
Somesville
1055 Main Street
Mt. Desert, ME 04660
South China
368 Route 3
China, ME 04358
Southwest Harbor
314 Main Street
Southwest Harbor, ME
04679
Topsham
2 Main Street
Topsham, ME 04086
Winter Harbor
385 Main Street
Winter Harbor, ME 04693
Bar Harbor Bankshares 24 2015 SUMMARY ANNUAL REPORT
Bar Harbor Bankshares
CORPORATE INFORMATION
ANNUAL MEETING
The Annual Meeting of shareholders
of Bar Harbor Bankshares will be held
at 11:00 a.m. on Tuesday, May 17, 2016
at the Bar Harbor Club located on
West Street in Bar Harbor, Maine.
FINANCIAL INFORMATION
Shareholders, analysts and other investors
seeking financial information about Bar
Harbor Bankshares should contact Gerald
Shencavitz, Executive Vice President, Chief
Financial Officer and Treasurer, at 207-288-3314.
INTERNET
Bar Harbor Bank & Trust information, as
well as Bar Harbor Bankshares Form 10-K,
is available at www.bhbt.com.
SHAREHOLDER ASSISTANCE
Questions concerning your shareholder
account, including change of address forms,
records or information about lost certificates
or dividend checks, should be directed to our
transfer agent:
American Stock Transfer & Trust Company, LLC
6201 15th Avenue
Brooklyn, New York 11219
800-937-5449 / www.amstock.com
STOCK EXCHANGE LISTING
Bar Harbor Bankshares common
stock is traded on the NYSE MKT, LLC
(www.nyse.com), under the symbol BHB.
FORM 10-K ANNUAL REPORT
The Company refers you to its Annual Report
on Form 10-K for fiscal year ended December
31, 2015 for detailed financial data, manage-
ment’s discussion and analysis of financial con-
dition and results of oper ations, disclosures
about market risk, market information includ-
ing stock graphs, descriptions of the business
of the Company and its products and services,
and a listing of its executive officers.
MAILING ADDRESS
If you need to contact our corporate
head quarters office, write:
Bar Harbor Bankshares
Post Office Box 400
82 Main Street
Bar Harbor, Maine 04609-0400
207-288-3314 • 888-853-7100
PRINTED FINANCIAL INFORMATION
We will provide, without charge, and upon
written request, a copy of the Bar Harbor
Bankshares Annual Report to the Securities
and Exchange Commission on Form 10-K. The
Bank will also provide, upon request, Annual
Disclosure Statements for Bar Harbor Bank &
Trust as of December 31, 2015. Please contact
Marsha C. Sawyer, Bar Harbor Bankshares
Clerk, at 207-288-3314 or the above address.
Annual Report Design by Curran & Connors, Inc. / www.curran-connors.com
Photography by Chris Pinchbeck/www.pinchbeckphoto.com pages 2, 4, 12 and 13.
B R A N D P R O M I S E :
Bar Harbor Bank & Trust is a true community bank. We recognize, appreciate,
and support the unique people and culture in the places we call home.
B R A N D S TO R Y:
Bar Harbor Bank & Trust understands the unique opportunities and challenges that
our customers face and we’re here to face them, too. We’re known for our excep-
tional support of the people, businesses and communities in the places we call
home. The staff is widely known as trustworthy, resourceful and friendly—people
who customers can count on to help them find solutions they need. Commitment
to honest service and belief in our customers are why Bar Harbor Bank & Trust
stands out as a true community bank.
1- 8 8 8 - 853 -710 0 w w w. B H B T. co m