ITEM 1.01 Entry Into a Material Definitive Agreement

On December 5, 2008, Bar Harbor Bank & Trust (the "Bank"), the wholly owned banking subsidiary of the registrant, Bar Harbor Bankshares (the "Company"), entered into a definitive Credit Card Account Purchase Agreement (the "Agreement") with U.S. Bank National Association, D/B/A Elan Financial Services ("Elan"). Under the terms of the Agreement, the Bank agreed to sell and transfer and Elan agreed to purchase and assume all of the Bank's individual and business revolving credit card line accounts as of November 30, 2008. The cash consideration provided to the Bank with respect to the sale is equivalent to approximately $2,070,118, which preliminarily represents 100% of the principal balances of the accounts sold as of November 30, 2008, plus a premium of 8% on such balances or approximately $165,609.

Company management believes that any loss of the credit card portfolio's contribution to the Company's profitability going forward is not material and will be largely offset by income from certain credit card revenue-sharing and joint marketing arrangements entered into with Elan in connection with the Agreement. Company management does not expect the sale to result in a significant change in net income from ongoing operations in the near term. Company management anticipates the Company's longer-term profitability may be favorably impacted if Elan is able to increase credit card penetration usage, although no assurance can be provided in that regard.

The Bank was advised by Morgan Keegan & Co. on this transaction.

Forward-Looking and Cautionary Statements

This Current Report on Form 8-K contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Company for which the Company claims the protection of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by the use of words like "strategy," "anticipates" "expects," "plans," "believes," "will," "estimates," "intends," "projects," "goals," "targets," and other words of similar meaning. You can also identify them by the fact that they do not relate strictly to historical or current facts. Forward-looking statements include, but are not limited to, those made in connection with management's expectations with respect to the short term and long term impact on the Company's profitability resulting from the transactions contemplated under the Elan Agreement, which are subject to change based on the impact of various factors that could cause actual results to differ materially from those projected or suggested due to certain risks and uncertainties. These risks and uncertainties include, but are not limited to, the inability of Elan and the Company to generate increased credit card usage and penetration within the Bank's customer base and market, changes in general economic conditions, interest rates, legislation or regulation and accounting principles. The Company assumes no obligation to update any forward-looking statements as a result of new information or future events or developments