KTHN Katahdin Bankshares Corporation (QX)

Katahdin Bankshares Corp. (OTCQB:KTHN) parent company of Katahdin Trust Company, today announced 2011 results.

2011 earnings were $4,561,000, a decrease of 4.0% from the prior year. "Although earnings are down slightly, we are very pleased with our continued strong performance in a struggling economy," said President & CEO, Jon J. Prescott. "Our results can be attributed in large part to continued strong operating earnings with good loan growth and ongoing improvement in our asset quality."

Total assets at December 31st reached a record high of $527,897,000, up 3.6% from the prior year. Total loans at $437,796,000 represented an increase of $30,367,000 or 7.5% over the prior year. Deposits grew by 5.4% over the prior year to $424,643,000 with core deposit growth representing a majority of the increase.

Prescott further stated that these type of results could not have been achieved without the efforts and commitment of the Bank's 187 employees who work diligently day after day to carry out the Bank's strategic initiatives. In 2011 the Bank was recognized for the 5th consecutive year by U.S. Banker Magazine as one of the Top 200 Community Banks in the United States.

In commenting on 2012 Prescott stated that it would indeed be a challenging year for banks but also said that this will not hinder Katahdin Trust Company's growth plans as expansion efforts continue in the greater Bangor area with the opening of an office on Springer Drive in the Christmas Tree Shops Plaza. This will mark the Bank's 17th branch location and its 3rd location in the greater Bangor area.

The Company issued a fourth quarter cash dividend on December 26th of $.09 per share which represented an increase of 9.8% over the prior period.

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
         
         Telephone: (207) 521-0455, Ext. 135