Bar Harbor Bankshares reported a 10.2 percent increase in first-quarter earnings and a decline in bad loans as credit quality improved.

The bank, which has 12 branches Down East and in the midcoast, said net income totaled $3.2 million, or 81 cents a share, up from $2.9 million, or 74 cents a share, in the year-ago quarter. Total assets increased by $57 million to $1.2 billion.

“We are encouraged to have started the year with record quarterly earnings, continued loan growth, improving credit quality and an expanding net interest margin,” said Joseph Murphy, chief executive officer and president.

The company said it has seen “sustained growth” in both commercial and consumer loans. Bad loans or nonperforming loans had declined.