Katahdin Bankshares Reports 6 Month Earnings of $2.2 Million

Katahdin Bankshares Corp. (OTCQB:KTHN), parent company of Katahdin Trust Company, today announced earnings of $2,182,000 for the first six months of 2011 which compares to $2,463,000 for the same period last year. Katahdin Trust Company President & CEO, Jon J. Prescott commented that good loan growth continued in the second quarter; however some shrinking of the net interest margin coupled with decreases in non-interest income led to a decrease in earnings year over year. "We are certainly pleased with this level of earnings despite the continuing struggling economy. We are especially pleased we were able to grow our loan portfolio by $21,790,000, assisting small businesses and consumers, which helped our local economy," said Prescott.  

Total loans at $427,640,000 represented an increase of 5.4% over the same period last year while deposits increased by $20,642,000 or 5.2%, to $417,396,000. Prescott stated that the majority of the deposit growth stemmed from the Bank's Broadway office in Bangor which opened last August. He went on further to state that the Bank's newest location which opened in Hampden on June 20 was also contributing to the deposit growth.       

Total assets reached a record high of $524,275,000.   

The Company issued a second quarter cash dividend of $.082 per share which was paid on June 27, 2011.         

Katahdin Bankshares Corp. stock is quoted on the OTC Markets quote board OTCQB under the symbol KTHN. Current stock information can be found on the OTC Markets website at www.otcmarkets.com/home. Katahdin Bankshares Corp. recently received recognition by U.S. Banker magazine, for the 5th consecutive year, as one of the top 200 community banks in the country. 

Established in 1918, Katahdin Trust Company 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
         Katahdin Trust Company
         Telephone:[phone], Ext. 135