Katahdin Bankshares Reports 1st Quarter Earnings

Katahdin Bankshares Corp. (OTCQB:KTHN) parent company of Katahdin Trust Company, today announced 1st quarter earnings of $1 million. Total assets grew to nearly $550,000,000 which President & CEO, Jon J. Prescott attributed to very strong loan growth of $40,372,000. Deposits also continued to grow, especially in the core checking and savings categories, up $24,075,000 over the prior year.

The Bank is on schedule to open its 17th branch location and 3rd location in the greater Bangor area on May 21 in The Christmas Tree Shops Plaza on Springer Drive, Bangor. In commenting on this new office Prescott stated that to better serve the Bank's business customers in the Bangor area the commercial loan office located at 12 Stillwater Avenue in Bangor will be relocating to this new location on Springer Drive, providing customers with a full array of business and personal loan and deposit services all from one convenient location.

The Company issued a first quarter cash dividend on March 26th of $.09 per share which was 9.8% above the first quarter of 2011. 

Katahdin Bankshares Corp. stock is quoted on the OTC Markets quote board OTCQB under the symbol KTHN. Current stock information can be found at otcmarkets.com/home.

Katahdin Trust Company, established in 1918, provides banking services to individuals and businesses from 16 offices in northern and central Maine, online at www.katahdintrust.com, and operates commercial loan offices in Bangor and Scarborough.

The Katahdin Bankshares Corp. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7340

CONTACT: Vicki Smith
         Senior Vice President, Marketing & Communications
         Katahdin Trust Company
         
         [phone], Ext. 135