Katahdin Bankshares Reports Strong 3rd Quarter Earnings and Record Growth

Katahdin Bankshares Corp. (OTCQB:KTHN), parent company of Katahdin Trust Company, today announced 3rd quarter results which show an increase to earnings per common share of $.05 or 5.8% over the same nine months of 2011, totaling net income of $3,123,000.

In commenting on the 3rd quarter's performance, Jon Prescott, President and CEO, stated that total assets, loans, deposits and equity all achieved record levels. Total assets grew to $577 million, an increase of 9.5% over the prior year, which Prescott attributed to very strong loan growth of nearly $53 million, an increase of 12.2% over the same period last year. Deposits reached $482,102,000, up 13.2% over the 3rd quarter in 2011 and shareholders' equity grew 5.5% to $57,594,000.

Prescott also commented that in July the Bank was honored by the American Bankers Association (ABA) with a Certificate of Recognition for Community Involvement. "Corporately, Katahdin Trust Company gives much back to our communities, and we're proud and privileged to do so," said Prescott. "But it's equally gratifying to know that our employees share this care and concern and give many hours of their personal time, to create a higher quality of life in our communities." The Bank's 191 employees rolled up their sleeves outside the confines of the Bank to invest nearly 14,000 hours of volunteer service this past year for a host of civic, charitable, church, educational and economic development organizations.

The Company issued a second quarter cash dividend on September 24th of $.09 per share which was 9.8% above the third quarter of 2012. 

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 17 offices in northern and central Maine, online at www.katahdintrust.com, operates a commercial loan office in Scarborough and was recently recognized by American Banker Magazine as one of the Top 200 Community Banks in the country, for the sixth consecutive year.

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