Bar Harbor Bankshares - Annual Report of Employee Stock Plans (11-K)
30 Juni 2008 - 10:35PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark one)
X
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ANNUAL
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
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For the
fiscal year ended: December 31, 2007
OR
___
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TRANSITION
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
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For the
transition period from
to
Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Bar Harbor Bankshares 401(k) Plan
Name of issuer of the securities held pursuant
to the plan and the address of its principal executive office:
Bar Harbor Bankshares
82 Main Street
Bar Harbor, Maine 04609
Appendix 1
BAR HARBOR BANKSHARES
401(k) PLAN
FINANCIAL STATEMENTS
And
SUPPLEMENTAL SCHEDULE
December 31, 2007 and 2006
Report of Independent Registered Public
Accounting Firm
Plan Administrator
Bar Harbor Bankshares 401(k) Plan
We have audited the accompanying statements of net
assets available for benefits of Bar Harbor Bankshares 401(k) Plan (the Plan) as of
December 31, 2007 and 2006, and the related statements of changes in net assets available
for benefits for the years then ended. These financial statements are the responsibility
of the Plans management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States) . Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to
above present fairly, in all material respects, the net assets available for benefits of
the Plan as of December 31, 2007 and 2006, and the changes in net assets available for
benefits for the years then ended in conformity with U. S. generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedule of assets held at
end of year is presented for the purpose of additional analysis and is not a required part
of the basic financial statements, but is supplementary information required by the
Department of Labors Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974. This supplemental schedule is the
responsibility of the Plans management. The supplemental schedule has been subjected
to the auditing procedures applied in the audit of the basic financial statements and, in
our opinion, is fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ KPMG LLP
Albany, New York
June 26, 2008
BAR HARBOR
BANKSHARES 401 (k) PLAN
Statements of Net Assets Available for Benefits
December 31, 2007 and 2006
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2007
|
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2006
|
|
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|
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Investments,
at fair value (note 3):
|
|
|
|
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Fiserv
Trust Institutional Money Market Fund
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$
|
844,024
|
|
1,160,338
|
Mutual
Funds
|
|
7,434,648
|
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6,369,011
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Common
stock of Bar Harbor Bankshares
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1,407,958
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1,313,324
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Particpant
loan
|
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329,984
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250,882
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Total
investments
|
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10,016,614
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9,093,555
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Receivables:
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|
|
|
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Employer contribution
|
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9,195
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|
9,023
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Participant contribution
|
|
19,172
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|
19,829
|
Total Receivables
|
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28,367
|
|
28,852
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Net assets available for benefits
|
$
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10,044,981
|
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9,122,407
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See accompanying notes to financial statements.
BAR HARBOR BANKSHARES 401 (k) PLAN
Statements of Changes in Net Assets Available for Benefits
December 31, 2007 and 2006
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2007
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2006
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Additions to net assets attributed to:
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|
|
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Investment income:
|
|
|
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Net appreciation in investments
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$
|
372,077
|
881,593
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Interest and dividends
|
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206,563
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175,200
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Investment income
|
|
578,640
|
1,056,793
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Contributions:
|
|
|
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Participants
|
|
525,053
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539,541
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Employer
|
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245,808
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426,356
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Rollovers
|
|
146,353
|
82,105
|
|
|
|
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Total contributions
|
|
917,214
|
1,048,002
|
|
|
|
|
Total increase
|
|
1,495,854
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2,104,795
|
|
|
|
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Deductions from net assets attributed
to:
|
|
|
|
Distributions
|
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(573,280)
|
(634,284)
|
|
|
|
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Net increase
|
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922,574
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1,470,511
|
|
|
|
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Net assets available for benefits:
|
|
|
|
Beginning of year
|
|
9,122,407
|
7,651,896
|
End of year
|
$
|
10,044,981
|
9,122,407
|
See accompanying notes to financial statements.
BAR HARBOR BANKSHARES 401 (k) PLAN
Notes to Financial Statements
December 31, 2007 and 2006
1.
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Description
of Plan
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The following
description of the Bar Harbor Bankshares (the Company or the Plan Sponsor) 40l(k) Plan
(the Plan) provides only general information. Participants should refer to the plan
document for a more complete description of the Plans provisions.
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(a)
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General
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The Plan is a defined
contribution plan covering all employees of the Company who have achieved the age of
20-1/2. There is no service requirement for eligibility. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
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(b)
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Contributions
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Each year, participants may
contribute up to 50% (limited to regulatory ceilings) of pretax annual compensation, as
defined in the Plan. Participants who have attained age 50 before the end of the Plan year
are eligible to make catch-up contributions (limited to regulatory ceilings). Participants
may also contribute amounts representing distributions from other qualified defined
benefit, IRA, or defined contribution plans. Participants direct the investment of their
contributions into investment options offered by the Plan. The Plan currently offers
eleven investment options for participants. During 2007, the Company matched 100% up to
the first 3% of each participants salary deferred and 50% on deferrals from 3% to 5%
of each participants salary. During 2006, the Company matched 50% up to the first 3%
of each participants salary deferrals and 25% on deferrals from 3% to 6% of each
participants salary that a participant contributed to the Plan. The Company match is
100% vested immediately and invested in the same manner as the participant has directed
for their contributions. Additional profit sharing amounts may be contributed at the
option of the Companys board of directors and, if provided, are vested immediately
and invested as directed by the participant. Additional contributions of $450 and $295,173
were made in 2007 and 2006, respectively.
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(c)
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Participants
Accounts
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Each participants account
is credited with the participants contribution, allocations of the Companys
match, and any profit sharing contributions along with an allocation, based upon a
participants account balance, of any earnings or losses. The Company pays most
expenses. The benefit to which a participant is entitled is the benefit that can be
provided from the Participants vested account.
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BAR HARBOR BANKSHARES 401 (k) PLAN
Notes to Financial Statements
December 31, 2007 and 2006
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(d)
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Vesting
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Participants are
vested immediately in their personal contributions and the Companys contributions.
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(e)
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Plan
Termination
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Although it has not
expressed any intent to do so, the Company has the right under the Plan to discontinue its
contributions at any time and to terminate the Plan subject to the provisions of ERISA. In
the event of Plan termination, participants would remain 100% vested in all funds
represented by their account balance.
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(f)
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Payment of
Benefits
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On termination of
service due to death, disability, or retirement, a participant may elect to receive either
(a) in a lump-sum amount equal to the value of the vested interest in his or her account
or (b) in annual installments. For termination of service for other reasons, a participant
may receive the value of the vested interest in his or her account as a lump-sum
distribution. Participants with balances in their accounts of less that $5,000 must take a
lump sum distribution.
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(g)
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Participant
Loans
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Participants may
borrow from their fund accounts the lesser of $50,000 or 50% of the account balance.
Participants may carry up to two loans secured by the balance in their account. Loans are
generally fixed rate and are written with an interest rate of 1% over Prime. Existing
loans presently range from 5% to 9.25%. Principal and interest is paid according to
amortization schedules through biweekly payroll deduction.
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(h)
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Risk and
Uncertainties
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The Plan invests in
various investment securities. Investment securities are exposed to various risk such as
interest rate and markets risks. Due to the level of risk associated with investment
securities, it is at least reasonably possible changes in the values of investments
securities will occur in the near term and that such changes could materially affect
participants account balances and the amounts reported in the statement of net
assets available for benefits.
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BAR HARBOR BANKSHARES 401 (k) PLAN
Notes to Financial Statements
December 31, 2007 and 2006
2.
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Summary of
Significant Accounting Policies
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(a)
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Basis of Presentation
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The Plans financial
statements have been prepared on an accrual basis of accounting. Benefits are recorded
when paid. Cash equivalents are generally funds held in the Fiserv Trust Institutional
Money Market Fund.
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(b)
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Investments
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The Plans investments are
valued on a daily basis, using established market values. Participant loans are valued at
their outstanding balances, which approximate fair value. Purchases and sales of
securities are recorded on a trade-date basis. Dividends are recorded on the ex-dividend
date.
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(c)
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Use of Estimates
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The preparation of financial
statements, in conformity with U. S. generally accepted accounting principles, require
management to make estimates and assumptions affecting the reported amounts of assets and
liabilities and changes therein, and disclosure of contingent assets and liabilities.
Actual results could differ from those estimates.
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(d)
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Reclassifications
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Prior year financial statements
are reclassified whenever necessary to conform to the current years presentation.
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BAR HARBOR BANKSHARES 401 (k) PLAN
Notes to Financial Statements
December 31, 2007 and 2006
3.
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Investments
|
|
|
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Investments that represent 5%
or more of the net assets available for benefits at December 31, 2007 and 2006 are as
follows:
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2007
|
2006
|
|
|
|
|
Money market funds:
|
|
|
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Fiserv Trust Institutional Money Market
|
|
844,024
|
1,160,338
|
Mutual funds:
|
|
|
|
American Growth Fund Inc
|
|
1,553,846
|
1,317,157
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American Europacific Growth Fund
|
|
641,800
|
350,705
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American New Perpective Fund
|
|
531,372
|
393,942
|
Intermediate Bond Fund America
|
|
566,214
|
471,089
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Investment Company of America
|
|
1,040,124
|
828,708
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MFS Total Return Fund A
|
|
557,299
|
531,292
|
Blackrock -- Mid Cap Value Equity Fund Class A
|
|
918,637
|
923,838
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Blackrock -- Aurora Class A
|
|
807,864
|
841,334
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Vanguard 500 Index Signal Shares
|
|
817,492
|
710,946
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Common stock:
|
|
|
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Bar Harbor Bankshares
|
|
1,407,958
|
1,313,324
|
During 2007 and 2006, the Plans investments
appreciated (depreciated) in value (including realized gains and losses on investments
bought, sold, and held during the year) as follows:
|
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Year ended December 31
|
|
|
|
|
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2007
|
2006
|
|
|
|
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Mutual funds
|
$
|
387,096
|
668,388
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Common stock of Bar Harbor Bankshares
|
|
(15,019)
|
213,205
|
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$
|
372,077
|
881,593
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The Internal Revenue Service has
issued an opinion letter dated December 19, 2001 to the sponsor of the plan that the form
of the Plan and underlying trust, as then designed, were in compliance with the applicable
requirements of the Internal Revenue Code (IRC) and therefore the plan is exempt from
income taxes. Although the Plan has been amended since receiving the opinion letter, the
plan administrator believes that the Plan is designed and is currently being operated in
compliance with the applicable requirements of the IRC.
BAR HARBOR BANKSHARES 401 (k) PLAN
Notes to Financial Statements
5.
Party-in-Interest
Transactions
Shares of common stock issued by the Company, represent
certain Plan investments (see Note 3). The decision to invest in Company stock is
voluntary on the part of participants. These transactions are party-in-interest
transactions. Senior officers are prohibited from purchasing, selling, or reallocating
their positions in the Companys common stock during times of established blackouts
or while in possession of insider information. Bar Harbor Trust Services, a subsidiary of
the Plan Sponsor, is the custodian with respect to the common stock of the Plan Sponsor.
Shares of Fiserv Trust Institutional Money Market Fund issued by Fiserv Trust Company, the
Plan trustee, represent party-in-interest transactions (see note 3). Participant loan
distributions and repayments are also considered party in-interest transactions.
6.
Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available
for benefits per the financial statements at December 31, 2007 and 2006 to Form 5500:
|
|
2007
|
2006
|
Net
Assets available for benefits:
Balance per the financial statements
|
$
|
10,044,981
|
9,122,407
|
Employer
and participant contribution
receivable not on Form 5500
|
|
(28,367)
|
(28,852)
|
Benefit
Claim and operating payable
|
|
(2,229)
|
(2,154)
|
|
|
|
|
Balance
per the Form 5500
|
$
|
10,014,385
|
9,091,401
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The following is a reconciliation of the increase in
net assets available for benefits per the financial statements for the years ended
December 31, 2007 and 2006 to Form 5500:
|
|
2007
|
2006
|
Net
increase in net assets available for assets:
Increase per the financial statements
|
$
|
922,574
|
1,470,511
|
Change
in contribution receivable not on Form 5500
|
|
485
|
(8,333)
|
Benefit
claim and operating payables
|
|
(75)
|
(2,154)
|
Balance
per the Form 5500
|
$
|
922,984
|
1,460,024
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Schedule 1
BAR HARBOR BANKSHARES 401(k) PLAN
Schedule H, Line 4i Schedule of Assets Held at End of Year
December 31, 2007
|
|
|
Identity of issuer,
borrower, lessor, or
similar party
|
|
Description of investment
including maturity date,
rate of interest, collateral, par,
or maturity value
|
|
Current
value
|
*
|
Fiserv Trust Institutional Money
|
|
|
|
|
|
Market Fund
|
|
Money market fund
|
$
|
844,024
|
|
Intermediate Bond Fund America
|
|
Bond mutual fund, 42,004 shares
|
|
566,214
|
|
American Growth Fund Inc
|
|
Equity mutual fund, 45,688 shares
|
|
1,553,846
|
|
Investment Company of America
|
|
Equity mutual fund, 31,567 shares
|
|
1,040,124
|
|
MFS Total Return Fund A
|
|
Equity mutual fund, 36,568 shares
|
|
557,299
|
|
Vanguard 500 Index Signal Shares
|
|
Equity mutual fund, 7,323 shares
|
|
817,492
|
|
Blackrock Mid Cap Value Equity
|
|
|
|
|
|
Fund Class A
|
|
Equity mutual fund, 77,785 shares
|
|
918,637
|
|
Blackrock Aurora Class A
|
|
Equity mutual fund, 36,621 shares
|
|
807,864
|
|
American Europacific Growth Fund
|
|
Foreign equity mutual fund, 12,617shares
|
|
641,800
|
|
American New Perspective Fund
|
|
Foreign equity mutual fund, 15,656 shares
|
|
531,372
|
*
|
Bar Harbor Bankshares
|
|
Common stock, 44,839 shares
|
|
1,407,958
|
*
|
Participant loans receivable
|
|
Interest rates 5.00% 9.25%
|
|
329,984
|
*
|
Party-in-interest.
|
|
|
$
|
10,016,614
|
See accompanying report of independent registered public accounting firm.
The Bar Harbor Bankshares 401(k) Plan (the Plan) is subject to the
Employee Retirement Income Security Act of 1974 (ERISA). Therefore, in lieu of the
requirements of Items 1-3 of Form 11-K, the financial statements and supplemental schedule
of the Plan for the two fiscal years ended December 31, 2007 and 2006, have been prepared
in accordance with the financial reporting requirements of ERISA, are attached hereto as
Appendix 1 and incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Trustees who administer the Bar Harbor Bankshares 401(k) Plan
have duly caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
Bar Harbor Bankshares 401(k) Plan
By: /s/Marsha C. Sawyer
Date: June 27, 2008
Marsha C. Sawyer
Plan Administrator
EXHIBIT INDEX
Exhibit No.
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Exhibit
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23
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Consent of KPMG LLP
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