SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 of
The Securities and Exchange Act of 1934

Date of Report (Date of earliest event reported):
February 7, 2002


BAR HARBOR BANKSHARES
(Exact name of registrant as specified in its charter)


MAINE				841105-D			01-0393663
(State or other jurisdiction		(Commission			(IRS
Employer
of incorporation)			File Number)
	Identification No.)


PO Box 400, 82 Main Street
Bar Harbor, ME							04609-0400
(Address of principal executive officers)				(Zip
Code)

Registrant's telephone number, including area code:  (207) 288-
3314


ITEM 5 - OTHER EVENTS

In an interview given on February 6, 2002 and published in a
financial industry newsletter on February 7, 2002, Dean S. Read,
chief executive officer of Bar Harbor Bankshares (the "Company")
and Bar Harbor Banking and Trust Company (the "Bank") made
certain statements regarding operational issues at the Bank that
have been raised by bank regulators and which are being addressed
by the Bank.   These issues include credit quality and standards,
allowances for loan losses and uses of capital and certain other
bank policies and procedures.

In response to the concerns raised, the Bank has increased its
allowances for loan loss, reclassified certain troubled loans,
developed a classified asset reduction plan for certain
commercial relationships, revised its credit administration plan,
implemented certain revisions in its asset appraisal procedures,
established a minimum capital threshold, revised certain account
reconciliation procedures, financial recordkeeping and other
procedures, and addressed weaknesses in its information systems.
The Bank also has implemented a policy of paying dividends only
from current earnings, exclusive of gains on the sale of
securities, and has initiated a long-term strategic planning
process, which is currently in progress.

In the interview, Mr. Read is quoted as stating his belief that
several of the issues raised are in significant part derived from
what he characterized as a "leveraged lending strategy" pursued
by the Bank in the late 1990's in order to "keep up its earnings
stream," coupled with underwriting standards characterized by Mr.
Read as "questionable."    Mr. Read since has indicated that his
reference in the interview was to a "leveraged investment
strategy" and not to a "leveraged lending strategy" and was
intended to refer to the investment strategy of the Bank of
borrowing from the Federal Home Loan Bank and investing in longer
term mortgage backed securities.  Mr. Read indicated in the
interview that the Bank stopped the leveraged funding strategy
that was in place when he joined the Bank.  Mr. Read has since
stated that while the Bank continues a leveraged investment
strategy, it has revised that strategy to better manage interest
rate risk.

Management believes that weaknesses in account reconciliation,
information systems and recordkeeping procedures are, at least in
part, derived from the departures of the chief financial officer
and controller of the Bank in the middle of an information
systems conversion in 2000.   There has been a significant
turnover in senior management since 1999.  Current management
believes that the Bank has taken positive steps to revise these
procedures.

In the interview Mr. Read expressed his belief that the
accounting issues raised by Bank regulators have been resolved
without a charge to earnings, capital levels are stable, and
tighter credit standards are in place.  Mr. Read has since stated
that capital levels far exceed well capitalized benchmarks.  In
the interview, he stated that he expects the Bank's provision for
loan losses in 2002 to exceed actual charge-offs, and he expects
the Bank's loan portfolio to grow under the direction of a new
commercial loan team and residential mortgage team.  The Bank
continues to maintain a capital position significantly above
minimum regulatory requirements.

In the Interview, Mr. Read stated that the Company has no plans
to divest its trust and investment subsidiary, BTI Financial
Group.

In the interview, Mr. Read expressed his view that actions
planned or taken by the Bank have adequately addressed the
principal concerns raised by the Bank's regulators.

Matters discussed herein include forward looking statements
involving risks and uncertainties for which Bar Harbor Bankshares
claims the protection of the safe harbor provided by the Private
Securities Litigation Reform Act of 1995.  These matters include,
but are not limited to, statements regarding the adequacy of the
Bank's efforts to address regulatory concerns, the adequacy of
provisions for future loan losses and the prospects for positive
growth in the Bank's loan portfolio.  While the Company believes
that the Bank has adequately addressed most of the concerns
raised by its principal regulator, the adequacy of its corrective
actions has not been finally reviewed and approved by pertinent
regulatory agencies.   Further, its future performance and that
of the Bank are subject to a number of other contingencies
including the ability of the Bank to successfully implement and
maintain internal procedures modified or introduced in response
to regulatory concerns, the adequacy of reserves to meet actual
future loan losses, the ability of the Bank to actually achieve
projected growth in its loan portfolio, general economic
conditions, asset quality, the ability to achieve increased
operating efficiencies, interest rate fluctuations, and
competition from other lenders and financial service providers.


ITEM 7 - FINANCIAL STATEMENTS AND EXHIBITS

(a)	Financial statements - not applicable
(b)	Pro forma financial information - not applicable
(c)	Exhibits  - None






SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.

Dated:  February 7, 2002



							BAR HARBOR BANKSHARES



							Dean S. Read
							President