SecProbe.io

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 DIVISION OF
  CORPORATION FINANCE

April 6, 2011
   Joseph M. Murphy President and Chief Executive Officer  Bar Harbor Bankshares   82 Main Street, P.O. Box 400   Bar Harbor, Maine 04609
Re: Bar Harbor Bankshares
 Form 10-K for the Fiscal Year Ended December 31, 2010   Filed March 16, 2011
File No.  1-13349
 Dear Mr. Murphy:

We have reviewed your filing and have the following comments. In some of our
comments, we may ask you to provide us w ith information so we may better understand
your disclosure.

Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advising us when you will provide the requested response. If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
 After reviewing any amendment to your filing and the information you provide in
response to these comments, we ma y have additional comments
 Form 10-K for the Fiscal Year Ended December 31, 2010

Management’s Discussion and Analysis of Fi nancial Condition and Results of Operation

Summary Financial Results

1. We note the significant increase in n on-performing loans during fiscal 2010
which was attributable to a $5,194 million commercial real estate development
loan to a local, non-profit housing author ity in support of an affordable housing
project. So that the reader has a clear understanding of this lending relationship,
please tell us and revise your future filings, to disclose the nature and terms of this

Joseph M. Murphy
Bar Harbor Bankshares
April 6, 2011  Page 2
loan including any associated guarantees.  Since the loan is currently non-performing you should address th e viability of the projec t including the sources of
repayment, current construction status , the underlying collateral and other
pertinent information as well.
 Notes to Consolidated Financial Statements

 Note 3: Loans and Allowance for Loan Losses

2. We note your portfolio segments and classes of financing receivables appear to be
the same for purposes of providing th e disclosures required by ASU 2010-20.
Please tell us how you considered paragraphs 310-10-55-16 through 310-10-55-
18 and 310-10-55-22 when determining that  further disaggregation of your
portfolio segments was not necessary.  Fo r instance, it is unclear as to how you
determined that there were not separate cl asses of financing re ceivables given that
33% of the total commercial real estate loans are to the lodg ing industry or the
fact that you make construction loan s that have different and unique
characteristics and are included within the residential real estate mortgage loan portfolio segment.

3. We note that the effective date s ection of the summary of ASU 2010-20
encourages, but does not require, comparativ e disclosure for earlier periods.  We
note you did not provide comp arative information for many of your credit quality
disclosures. To the extent the informati on required for comparat ive disclosure is
reasonably available, please consider providing comparative footnote disclosure
in all future filings considering the si gnificant benefit this information provides
investors and the objective of the ASU.

4. Please tell us and revise your disclosures in  future filings to address the following:

• The policy for recording payments received on nonaccrual accrual receivables
in accordance with ASC 310-10-50-6(b);
• The policy for recognizing interest income on impaired loans, including how
cash receipts are recorded in accord ance with ASC 310-10-50-15(b); and
• The related amount of interest income recognized in accordance with ASC
310-10-50-15(c)(1).

5. We note your disclosure on within Note 3 as  it relates to “other assets  especially
mentioned” of loans which are considered to be within this specific classification
due to a variety of factors.  These factors may cause the loan officer to improperly
supervise the credit due to a lack of expertise, inadequate loan agreement, the
poor condition of or lack of control over collateral, failure to obtain proper loan
documentation or any other possible situati ons or circumstances. Each of these
factors disclosed would seem to be re presentative of a well defined weakness

Joseph M. Murphy
Bar Harbor Bankshares   April 6, 2011  Page 3
requiring classification within the “substandard” category.  Please address as to why the current classification is appropriate.  Further, te ll us whether these loans
as classified within this category are performing or nonperforming. You should
also address how this particular internal risk rating relates to the likelihood of loss
in accordance with ASC 310-10-50-30.

* * * *

 We urge all persons who are responsibl e for the accuracy an d adequacy of the
disclosure in the filing to be certain that the filing includes the information the Securities
Exchange Act of 1934 and all applicable Exch ange Act rules require. Since the company
and its management are in possession of all f acts relating to a company’s disclosure, they
are responsible for the accuracy and adequacy of the disclosures they have made.

In responding to our comments, please provi de a written statement from the company
acknowledging that:
• the company is responsible for the adequacy  and accuracy of the disclosure in the
filing;

• staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any act ion with respect to the filing; and

• the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any person under the federal secu rities laws of the
United States.   You may contact Marc Thomas, Staff Accountant, at (202)  551-3452 or me at
(202) 551-3492 if you have any questions regarding the above comments.
Sincerely,
          John P. Nolan         Sr Asst. Chief Accountant