KTHN Katahdin Bankshares Corporation (QX)

Katahdin Bankshares Corp. (OTCQB:KTHN), parent company of Katahdin Trust Company, today announced the Bank's continued expansion plans in the Bangor market with renovations set to begin on a full-service branch located on Springer Drive in the Christmas Tree Shops Plaza. "We continue to experience a good reception to our entry into the greater Bangor area," said Katahdin Trust Company President & CEO, Jon J. Prescott. "Our new Bangor branch will offer customers a spacious and comfortable retail banking facility as well as access to a team of commercial lending professionals." Prescott noted that the new branch has tremendous accessibility from the mall area and to I-95. "This new location will enhance our customers' experience by providing both deposit and loan services for individual and business needs and supplements our branch offices on Western Avenue in Hampden and Bangor's Broadway Shopping Plaza.

The Company's net income for the first 9 months of the year was $3,391,000. "Although this was down by 5.7% over the prior year, given the economic conditions prevalent during this period, we are pleased with our results," stated Prescott. Total loans increased by $32,117,000 or 8.0% over the prior year. "We are certainly pleased with this strong loan growth that has enabled us to provide significant support for individuals and businesses in our local market area as we all work together during these challenging times." Deposits also increased by $39,877,000. Prescott attributed much of that growth to the Bank's expansion into the Bangor market area. Total assets reached a record high of $527,171,000, an increase of 5.8% over the prior year.

The Company issued a third quarter cash dividend of $.082 per share which was paid on September 26, 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
         
         (207) 521-0455, Ext. 135