BAR HARBOR BANKSHARES Leases Disclosure
NOTE 17. LEASES
A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Most of our leases are for branches, ATM locations, and office space and have terms extending through 2040. All leases are classified as operating leases, and are recognized on the Consolidated Balance Sheets as a right-of-use (“ROU”) asset with a corresponding lease liability.
The following table presents the consolidated statements of condition classification of the ROU assets and lease liabilities:
(in thousands) | | Classification | | December 31, 2025 | | December 31, 2024 | ||
Lease Right-of-Use Assets |
| | | |||||
Operating lease right-of-use assets |
| $ | 9,251 | $ | 8,586 | |||
Lease Liabilities |
| |
| |
| | ||
Operating lease liabilities |
|
| 9,990 |
| 9,240 | |||
The calculated amount of the ROU assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used for the present value of the minimum lease payments. The lease agreements often include one or more options to renew at our discretion. If at lease inception, we consider the exercising of a renewal option to be reasonably certain, we will include the extended term in the calculation of the ROU asset and lease liability.
The following table presents the weighted average lease term and discount rate of the leases:
| December 31, 2025 | | December 31, 2024 | |||
Weighted-average remaining lease term (in years) | | | ||||
Operating leases | 10.94 | 11.74 | ||||
Weighted-average discount rate | | | ||||
Operating leases | 3.15 | % | 2.83 | % | ||
The following table represents lease costs and other lease information. As we have elected, for all classes of underlying assets, not to separate lease and non-lease components and instead to account for them as a single lease component, the variable lease cost primarily represents variable payments such as real estate taxes, common area maintenance and utilities.
For the Years Ended December 31, | |||||||||
(in thousands) | 2025 | | 2024 | 2023 | |||||
Lease Costs | |
| | | |||||
Operating lease cost | $ | 1,655 | $ | 1,647 | $ | 1,343 | |||
Variable lease cost |
| 329 |
| 20 |
| 485 | |||
Total lease cost | $ | 1,984 | $ | 1,667 | $ | 1,828 | |||
Supplemental cash flow information related to leases was as follows: | |||||||||
Cash paid for amounts included in the measurement of operating lease liabilities | $ | 1,570 | $ | 1,471 | $ | 1,436 | |||
Right-of-use assets obtained in exchange for new operating lease obligations | 2,124 | — | — | ||||||
Future minimum payments for operating leases with initial or remaining terms of one year or more as of December 31, 2025 are, as follows:
(in thousands) | | Payments | |
Twelve Months Ended: |
| | |
December 31, 2026 | $ | 1,687 | |
December 31, 2027 |
| 1,575 | |
December 31, 2028 |
| 1,233 | |
December 31, 2029 |
| 962 | |
December 31, 2030 |
| 725 | |
Thereafter |
| 4,881 | |
Total future minimum lease payments |
| 11,063 | |
Amounts representing interest |
| (1,073) | |
Present value of net future minimum lease payments | $ | 9,990 | |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 13, 2026 | Showing above |
| 2024 | Mar 11, 2025 | |
| 2023 | Mar 11, 2024 | |
| 2022 | Mar 14, 2023 | |
| 2021 | Mar 14, 2022 | |
| 2020 | Mar 10, 2021 | |
| 2019 | Mar 10, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.