Bar Harbor to Buy Small Maine Bank in First-Ever Deal

Bar Harbor Bankshares (BHB) in Maine has struck its first deal in its 125-year history, announcing late Tuesday that it is buying substantially all of the assets and deposits of Border Trust Company in Augusta.

The $1.2 billion-asset parent Bar Harbor Bank & Trust said it would purchase Border's core deposits for a 3.85% premium and its loan portfolio — excluding certain problem loans — for a 3% discount to book value.

Border Trust, a unit of Border Bancshares, was founded in 1969 and has $47 million of assets and three branches in Augusta, South China and Topsham, Maine.

In a news release, Bar Harbor President and Chief Executive Joseph M. Murphy said that the combination is "a logical step in our defined strategy to expand further south and west into markets with attractive demographics, long-term growth potential, and where we have already established significant commercial banking relationships."

He added that customers have urged Bar Harbor to open a branch in the Topsham/Brunswick area and "we are delighted that this combination provides us a physical location in such an attractive market."

Bar Harbor reported a record $3.2 million profit in the first quarter and analysts had speculated recently that the company might be eyeing acquisitions in an effort to deploy capital and maintain its momentum.

Bar Harbor Bank & Trust was founded in 1887 and according to the Federal Deposit Insurance Corp. it has never made a whole-bank acquisition. The company went public in 1997.

In Border, Bar Harbor is taking over a company that has struggled with asset quality issues of late; it lost more than $5 million in the last four calendar years, according to the FDIC.

Murphy said that Bar Harbor will offer jobs to as many Border employees as it can and will provide severance packages and outplacement services for those it cannot take on.

The deal is expected to close next quarter.