Updated 3/6/25
Bar Harbor Bankshares (BHB) is a well-established regional bank that has been serving communities in Northern New England for over 130 years. Unlike the big national banks that often chase high-growth strategies, BHB focuses on steady, conservative banking. That means disciplined lending, strong customer relationships, and a commitment to returning value to shareholders through dividends.
For income investors, stability is key. With the financial sector facing constant changes—whether from interest rate fluctuations or economic uncertainty—dividend sustainability matters more than just a high yield. Let’s take a closer look at what makes BHB a strong candidate for dividend-focused portfolios.
Key Dividend Metrics
📈 Dividend Yield: 3.89%
💰 Annual Dividend: $1.20 per share
🔄 5-Year Average Dividend Yield: 3.79%
📊 Payout Ratio: 41.55% (plenty of room for continued payments)
📆 Next Dividend Payment: March 20, 2025
❌ Ex-Dividend Date: February 20, 2025
📈 Dividend Growth: Consistent increases over time
Dividend Overview
Bar Harbor Bankshares currently offers a 3.89% dividend yield, which is slightly above its five-year average. That suggests the stock is trading at a reasonable valuation relative to its historical yield. For long-term income investors, this is a solid balance—high enough to provide meaningful income but not so high that it signals potential trouble.
A key factor in any dividend stock is how well the company can sustain its payouts. BHB has a payout ratio of just 41.55%, meaning less than half of its earnings go toward dividends. That’s a healthy level, leaving room for future increases while allowing the company to reinvest in its operations.
Another positive sign is consistency. BHB hasn’t cut its dividend in recent years, and with its latest payout scheduled for March 20, 2025, the bank continues its long history of rewarding shareholders.
Dividend Growth and Safety
Yield is important, but so is the ability to grow dividends over time. While BHB isn’t a rapid dividend grower like some larger financial institutions, it has steadily increased payouts. This disciplined approach aligns with the bank’s conservative management style—prioritizing long-term stability over short-term gains.
The bank’s profitability metrics reinforce its ability to continue these payouts:
- Return on Assets (ROA): 1.08% (healthy for a regional bank)
- Return on Equity (ROE): 9.78% (shows efficient capital use)
- Profit Margin: 29.26% (strong earnings efficiency)
These figures indicate BHB is running a well-managed operation. Unlike banks that take on excessive risk to boost short-term earnings, BHB’s model is built for the long haul.
Another reason for confidence in the dividend is loan quality. Some regional banks have been caught off guard by rising delinquencies, but BHB has maintained a conservative lending strategy, reducing its exposure to high-risk borrowers.
Chart Analysis
Price Action and Trend
The chart for Bar Harbor Bankshares (BHB) shows a clear uptrend that started around mid-2023, with the stock making a strong move higher before peaking near $37.50. Since then, the stock has been in a downward correction, with lower highs forming in the past few months. The recent price action shows continued weakness, with the stock closing at $25.33 on March 11, 2024.
The price is currently trading below both the 50-day moving average (orange line) and the 200-day moving average (blue line). This suggests that short-term momentum has turned bearish, and the stock is at a critical point where it needs to regain strength to avoid further downside.
Moving Averages
The 50-day moving average has been sloping downward since early 2024, indicating that the short-term trend has lost momentum. More importantly, the stock has now fallen below the 200-day moving average, which is a key support level for longer-term investors. If the price fails to reclaim this level soon, it could signal the beginning of a more extended period of weakness.
If the 50-day moving average crosses below the 200-day moving average, it would create what is known as a “death cross,” a technical signal that often warns of further downside.
Volume and Market Participation
Volume has remained relatively low in recent weeks, except for a couple of noticeable spikes, which suggest some institutional activity. The most recent volume bars do not show any significant increase in buying pressure, meaning that demand has not yet returned in a meaningful way.
When the stock was rallying last year, the volume was much stronger, indicating strong participation. However, the current decline has been accompanied by lower volume, which suggests that sellers are not dumping shares aggressively, but buyers are not stepping in with conviction either.
Relative Strength Index (RSI)
The RSI is currently at 47.67, which puts it in a neutral zone. This means that the stock is not yet oversold, but it is also not showing strong momentum to the upside. If RSI moves below 30, it could indicate that the stock is reaching an oversold condition, which may attract buyers looking for a reversal. On the other hand, if RSI fails to push above 50, it could signal continued weakness.
Support and Resistance Levels
Key support is now around $25, which was the recent low. If this level breaks, the next area to watch would be around $23, where the stock last found buyers in mid-2023. On the upside, resistance sits near $30.33, which coincides with the 200-day moving average. A breakout above this level would be an early sign that the stock is attempting to recover.
For now, the stock is at a crossroads, with support and resistance levels providing key areas to watch in the coming weeks.
Analyst Ratings
📉 Downgrades
🔻 On December 13, analysts at a major research firm revised their outlook on Bar Harbor Bankshares, moving their rating from Buy to Hold. The primary reason behind this downgrade was the stock’s significant price appreciation in the months prior, which analysts believed had already priced in much of the company’s growth potential. While the bank continues to maintain strong financial health, the valuation had reached a level that justified a more neutral stance.
📊 They also pointed out that with interest rate fluctuations and macroeconomic uncertainties, the potential for further upside might be limited in the near term. As a result, they opted for a more cautious approach, advising investors to wait for a better entry point before increasing exposure to the stock.
📈 Upgrades
🔺 More recently, on January 27, the same firm revisited its stance and raised the price target on BHB from $34 to $35 while maintaining a Hold rating. This adjustment was influenced by BHB’s solid earnings performance and steady asset quality.
🏦 Analysts noted that the bank’s ability to generate stable revenue despite broader economic headwinds was a positive indicator for its long-term stability. Additionally, improving efficiency and strategic growth initiatives contributed to the higher price target, signaling a slightly more optimistic outlook.
💰 Consensus Price Target
📍 The current consensus price target among analysts stands at $34, reflecting a neutral but cautiously optimistic sentiment. This target suggests that while there is still some room for growth, the stock may already be fairly valued at its current levels.
📊 Analysts have factored in the company’s earnings consistency, regional economic conditions, and overall banking sector trends when making these projections. While some see potential for further gains, others remain cautious given the broader market conditions.
These ratings highlight a balanced perspective on Bar Harbor Bankshares, recognizing its strengths while keeping an eye on external factors that could impact future performance.
Earnings Report Summary
Bar Harbor Bankshares wrapped up the fourth quarter of 2024 with solid results, showing steady growth across key areas. The bank reported a net income of $11 million, which works out to $0.72 per share—a slight increase from the previous year’s $10.5 million or $0.68 per share. These numbers reflect a well-managed operation that continues to expand at a steady pace.
Total assets climbed to $3.6 billion, up from $3.5 billion at the end of 2023. A big driver of this growth was the bank’s lending business, particularly in the commercial sector. Loans grew by 4%, reaching $2.8 billion, showing that businesses in the region continue to rely on Bar Harbor Bankshares for financing.
Deposits also ticked up by 3%, hitting $3.1 billion, as customers continued to trust the bank with their savings and checking accounts. The rise in core deposits suggests that the bank’s digital banking initiatives and customer-friendly approach are paying off.
On the earnings side, net interest income came in at $28 million, a 5% increase from last year. This growth came from a combination of more loans being issued and solid management of interest rates. Despite the competitive environment, the bank has been able to maintain stable net interest margins, which is a positive sign for future earnings.
Beyond lending, the bank’s non-interest income held steady at $6 million. A boost in wealth management revenue helped balance out a slight dip in mortgage banking income. The wealth management business continues to be a bright spot, showing growing demand for financial advisory services.
Costs remained in check, with operating expenses totaling $18 million, about the same as last year. The efficiency ratio improved to 58%, down from 60%, meaning the bank is running more efficiently while still growing.
Loan quality remains strong, with non-performing assets making up just 0.25% of total assets—an improvement from 0.27% last year. The bank is keeping a conservative approach to lending, with an allowance for loan losses at 1.1% of total loans, showing they’re prepared for potential economic bumps ahead.
To top it off, the bank’s quarterly dividend remains steady at $0.30 per share, with shareholders set to receive payments on March 20, 2025. This reflects the bank’s continued commitment to rewarding investors while maintaining a solid financial position.
Overall, the numbers show a bank that’s growing at a steady pace, managing risk well, and keeping shareholders happy with reliable dividends.
Financial Health and Stability
For dividend investors, financial stability is just as important as yield. A company that stretches itself too thin to pay dividends can end up cutting them when times get tough. Fortunately, BHB looks solid from a financial perspective.
- Book Value Per Share: $30.00 (stock is trading close to intrinsic value)
- Total Cash: $72.16 million (provides liquidity)
- Total Debt: $290.6 million (manageable for a bank of this size)
- Price-to-Book Ratio: 1.03 (suggests fair valuation)
The bank’s low beta of 0.69 means it’s less volatile than the broader market, which is a big plus for conservative investors. Revenue has also remained steady, with year-over-year growth of 1.9%, while quarterly earnings grew 10.6%.
This kind of slow but steady financial performance is exactly what income investors should look for. It’s not flashy, but it’s reliable—just like BHB’s dividend.
Valuation and Stock Performance
At $30.78 per share, BHB is trading at a price-to-earnings (P/E) ratio of 10.86, which is reasonable for a bank of its size. The stock has experienced some volatility, ranging from $23.26 to $38.47 over the past year, but overall, it has remained within a stable trading range.
Key valuation factors:
- Price-to-Sales Ratio: 3.13 (reasonable for a regional bank)
- Price-to-Book Ratio: 1.03 (not overvalued)
The stock is currently sitting just below its 50-day moving average of $31.55 and right in line with its 200-day moving average of $30.71. This suggests the stock is in a neutral zone—not significantly overbought or oversold.
For long-term investors looking at valuation, BHB appears to be priced fairly, making it an interesting option for those seeking steady income.
Risks and Considerations
While BHB is a strong dividend payer, no investment is without risks. Here are a few things investors should keep in mind:
- Interest Rate Sensitivity – Banks rely on the difference between lending rates and deposit rates to make money. If interest rates fall significantly, it could pressure margins and slow earnings growth.
- Regional Economic Dependence – Since BHB operates primarily in Northern New England, any economic downturn in that region could impact loan demand and credit quality.
- Regulatory Risks – Banking regulations can change, sometimes leading to increased compliance costs or restrictions on how capital is allocated.
- Stock Price Volatility – While BHB has a relatively low beta, its stock price has moved between $23.26 and $38.47 over the past year, meaning there is still some volatility.
- Loan Portfolio Risk – Even though BHB has been conservative in lending, no bank is immune to rising delinquencies. A sharp increase in bad loans could hurt profitability and, in extreme cases, put pressure on the dividend.
Despite these risks, BHB’s strong capital position and disciplined management help mitigate major concerns.
Final Thoughts
Bar Harbor Bankshares offers an appealing mix of dividend income, financial stability, and conservative management. The 3.89% dividend yield, combined with a low payout ratio and solid earnings, makes it an attractive choice for income-focused investors.
This stock isn’t going to deliver rapid growth, but that’s not the goal for dividend investors. What it does offer is steady income, a reliable payout history, and a well-managed balance sheet.
For investors seeking a regional bank with a history of strong dividends, BHB stands out as a stock worth considering. Keeping an eye on economic conditions and interest rate trends will be important, but as of now, the company remains a solid player in the dividend space.
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