Bank reports earnings

    Katahdin Bankshares Corp., the parent company of Katahdin Trust Company, has reported 2007 earnings of over $4 million, the highest earnings in the company’s history. Net income for the fourth quarter was $1,095,000.
    “We are extremely pleased with our 2007 performance,” said Jon J. Prescott, President and CEO of Katahdin Trust Company. “Our net income of $4,251,000 represented an increase of 3.3 percent over the prior year.” Prescott attributed the record earnings to strong loan growth of $30.6 million coupled with maintaining a modest tightening of the net interest margin. “Our 150 employees are to be commended for their commitment and dedication in helping the Company to achieve this success,” said Prescott.
    The Company ended 2007 with total assets at a record high of $428,237,000, an 8.9 percent increase over the prior year. Loans increased by 10.6 percent for the year with a significant portion of the growth attributable to the Loan Production Office in Scarborough, which the Bank began operating in February of 2007. Deposits grew by 7.7 percent to $339,236,000. Approximately 54 percent of the growth was from local deposits with brokered CDs representing the balance of the growth.
    Earnings per share at year-end were $1.28, a decrease of $.09 per share from the prior year. “This slight decline is the result of the issuance of stock in the Company’s capital raise last March,” said Prescott, “however the equity raised will ensure the Company has enough capital to grow for the foreseeable future.” Total equity at year-end was $34,670,000, an increase of 34.3 percent year over year.
    The Company’s fourth quarter dividend of $.068 per share represented a 23.6 percent annualized increase over 2007.
    In commenting on the current market conditions that has many banks, particularly large banks, suffering from write downs in their mortgage portfolios, Prescott stated that he did not see any significant problems in this area for Katahdin Trust Company as the Bank has traditionally focused on conventional mortgage lending. He further stated that the Company has been fortunate over the past year to hold its net interest margin fairly stable and that it will be an even greater challenge to continue to do so as the interest rate environment is extremely volatile, with the dramatic falling of rates over the past few weeks.
    Prescott also announced that the Company has applied for regulatory approval to open a Loan Production Office at 12 Stillwater Avenue in Bangor.
    “Management continually explores growth opportunities and we feel this location will be a great addition to our existing franchise,” said Prescott. “We anticipate operating from this new location late in the first quarter.”
    Cale Burger, who joined the Bank last fall as Vice President and Commercial Services Officer with responsibility for small business lending and development in the Greater Bangor area will be located in this office.
    Katahdin Bankshares Corp. stock is quoted on the NASDAQ Over-the-Counter Bulletin Board (OTCBB) under the symbol KTHN. Current stock information can be found on the OTCBB website at www.otcbb.com.
    Katahdin Trust Company, established in 1918, provides banking services to individuals and businesses from 14 offices in northern Maine, online at www.katahdintrust.com and operates a loan production office in Scarborough.