Executive Summary

Q2 2025 core diluted EPS was $0.70, slightly above Wall Street consensus $0.69; GAAP diluted EPS was $0.40 due to $4.9M non-core losses on available-for-sale securities; revenue of $$34.541M missed consensus $$39.305M, though core revenue totaled $$39.483M, implying underlying strength . EPS and revenue consensus values retrieved from S&P Global*.
Net interest margin expanded to 3.23% from 3.17% in Q1, reflecting asset repricing and loan mix, while the efficiency ratio held near 62% .
Acquisition catalyst: all regulatory approvals received to acquire Guaranty Bancorp (Woodsville Guaranty Savings Bank); closing expected at or near month-end (July 2025), supporting scale and deposit dynamics .
Dividend maintained at $0.32 per share (4.27% annualized yield on 6/30 price), reinforcing shareholder return discipline .

What Went Well and What Went Wrong

What Went Well
- “Net interest margin expanded to 3.23% from 3.17%,” highlighting margin stability above peers, supported by higher yielding CRE loans .
- Commercial loans grew 4% annualized; C&I rose $30.2M QoQ; management emphasized consistent core earnings and strong execution while advancing integration planning .
- Regulatory approvals for the Woodsville acquisition secured; CEO: “strategic opportunity to strengthen our presence in key markets with good deposit dynamics, increase operational scale…” .
What Went Wrong
- Non-interest income fell to $$4.646M from $$9.457M YoY on $4.9M impairment losses in AFS debt securities and receivables (credit deterioration), pulling GAAP EPS down to $0.40 .
- Non-interest expenses increased to $$26.538M (+$2.7M YoY), including $1.2M acquisition costs, pressuring efficiency despite core margin strength .
- Deposit mix shifted away from money market (-$34.6M QoQ) toward time deposits (+$32.0M), raising funding costs sensitivity amid volatile rates .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
GAAP Diluted EPS ($)	$0.67	$0.66	$0.40
Core Diluted EPS ($)	$0.66	$0.68	$0.70
Total Revenue ($USD Millions)	$37.216	$37.925	$34.541
Total Core Revenue ($USD Millions)	$37.166	$37.925	$39.483
Net Interest Margin (%)	3.09	3.17	3.23
Efficiency Ratio (%)	62.78	62.00	62.10
Net Income ($USD Millions)	$10.257	$10.211	$6.092

Loans Breakdown ($USD Thousands)	Jun 30, 2024	Mar 31, 2025	Jun 30, 2025
Commercial Real Estate	1,634,658	1,762,132	1,767,206
Commercial & Industrial	421,297	370,683	400,908
Residential Real Estate	854,718	807,514	796,184
Consumer	99,776	105,404	111,036
Total Loans	3,064,181	3,124,240	3,152,664

KPIs	Q2 2024	Q1 2025	Q2 2025
Total Assets ($USD Millions)	$4,034	$4,063	$4,112
Total Deposits ($USD Millions)	$3,140	$3,297	$3,292
Loans/Deposits (%)	98	95	96
Non-accruing Loans / Total Loans (%)	0.20	0.26	0.31
ACL on Loans / Total Loans (%)	0.94	0.92	0.92
Book Value/Share ($)	28.81	30.51	30.60
Tangible BV/Share ($)	20.68	22.47	22.58

Results vs Estimates (S&P Global)	Consensus	Actual	Surprise
EPS Normalized ($)	$0.69*	$0.70	+$0.01* (Beat)
Primary EPS ($)	$0.69*	$0.70	+$0.01* (Beat)
Revenue ($USD Millions)	$39.305*	$34.541	-$4.764* (Miss)

Note: Values retrieved from S&P Global*. EPS consensus and surprise are on a normalized/core basis; BHB’s GAAP EPS was $0.40 due to non-core losses .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share	Q3 2025	$0.32 (declared Q1 2025)	$0.32 (record 8/14, payable 9/12)	Maintained
Guaranty Bancorp (Woodsville) Acquisition	Jul 2025	Signed definitive agreement; integration planning underway	All regulatory approvals obtained; expected closing end of July 2025	Progressed
Explicit financial guidance (revenue, margins, OpEx, tax rate)	2025	Not provided	Not provided	NA

Earnings Call Themes & Trends

Transcript for Q2 2025 was not available at time of analysis; themes synthesized from press releases across quarters.

Topic	Previous Mentions (Q4 2024 and Q1 2025)	Current Period (Q2 2025)	Trend
Net Interest Margin	Stable at 3.15–3.17%; focus on disciplined pricing and CRE mix	Expanded to 3.23%; asset yields up, CRE yields 5.76%	Improving
Loan Growth Mix	CRE drove growth; intent to accelerate C&I with senior hires	C&I +$30.2M QoQ; CRE +$5.1M; residential down	Mix shifting toward C&I
Deposit Mix & Funding	Time deposits rising with rate environment; money market up in Q4	Money market -$34.6M; time +$32.0M; non-interest demand +$4.7M	Mix tilting to term deposits
Credit Quality	Non-accruals low; ACL ~0.91–0.92%	Non-accruals 0.31%; ACL 0.92%; net charge-offs 0.03% annualized	Slight deterioration but still stable
Non-core Items & Securities	Q4: $1.17M ACL on AFS securities; interest receivable charge-off	$4.9M AFS losses due to credit deterioration; lowered non-interest income	Adverse in Q2
M&A / Integration	Announced Woodsville acquisition; strategic adjacency	All approvals obtained; closing imminent	Advancing

Management Commentary

“This partnership represents a strategic opportunity to strengthen our presence in key markets with good deposit dynamics, increase operational scale, and deliver greater value to our customers… while demonstrating continued ability to execute growth opportunities for shareholders” — Curtis C. Simard, President & CEO .
“Our results mark another consistent quarter of core earnings with a stable and expanding margin well above our peers… I am very proud of the way our teams performed all the while working on integration plans and other strategic objectives” .
Q1 context: “Despite the volatility in the capital markets, our teams continue to demonstrate… responsible management of the balance sheet underscores our commitment to profitable growth” .

Q&A Highlights

Q2 2025 earnings call transcript was not located in company filings or our document database; no Q&A specifics available. We infer focus areas (NIM trajectory, deposit mix, non-core losses, acquisition timing) from management’s release commentary .

Estimates Context

EPS normalized/core of $0.70 beat S&P Global consensus $0.69 by $0.01; headline GAAP EPS $0.40 reflects $4.9M non-core losses on AFS securities, suggesting limited impairment to core run-rate . EPS values retrieved from S&P Global*.
Revenue of $$34.541M missed S&P Global consensus $$39.305M as non-interest income was depressed by the AFS losses; core revenue of $$39.483M implies underlying operations would have met or modestly exceeded consensus absent non-core charges . Revenue values retrieved from S&P Global*.
Forward estimate recalibration likely: near-term Street models may remove similar non-core losses, maintain improving NIM and incorporate Woodsville closing (deposits and scale uplift) .

Key Takeaways for Investors

Core earnings resilient: normalized EPS beat consensus; NIM expansion to 3.23% indicates pricing discipline and asset yield support as CRE yields rose to 5.76% .
Headline GAAP miss driven by one-time AFS security impairments ($4.9M) rather than core operations; watch for further disclosures on credit deterioration of corporate debt holdings .
Deposit mix migrating to time deposits with rate volatility; funding costs remain a watchpoint even as total interest-bearing deposit costs edged down YoY to 2.28% .
C&I momentum building (+$30.2M QoQ), aligning with management’s goal to better balance commercial portfolio beyond CRE .
Acquisition close is a near-term catalyst: regulatory approvals secured; integration should enhance deposit dynamics and operational scale—monitor timing and initial pro forma disclosures .
Credit quality broadly stable despite higher non-accrual ratio QoQ; ACL coverage remains 0.92%, net charge-offs minimal (0.03% annualized) .
Dividend maintained at $0.32; consistent capital return alongside core profitability may support valuation pending clarity on non-core securities losses and M&A synergies .

Sources: Q2 2025 Form 8-K and Exhibit 99.1 (Press Release) ; Q1 2025 Press Release ; Q4 2024 Press Release . EPS and revenue estimates from S&P Global*.

BAR HARBOR BANKSHARES (BHB)·Q2 2025 Earnings Summary