Houlton-based Katahdin Bankshares Corp. saw profits slip in the second quarter, compared to the same period a year ago, on earnings that also fell.
The company on Monday reported second-quarter profits of $1.05 million, compared to $1.34 million in 2010. Katahdin Bankshares is the parent company of Katahdin Trust Co., which has16 branches in northern and central Maine, as well as commercial loan offices in Bangor and Scarborough. The bank employs 186 people statewide.
Earnings in the second quarter came in at $2.18 million, compared to $2.46 million last year. In a Monday statement, Katahdin Bankshares President and CEO Jon Prescott said the drop was the result of shrinking of the net interest margin coupled with decreases in non-interest income.
“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, in a release.
In the quarterly report, Prescott said the decrease in non-interest income was expected, and came due to “regulatory changes in how we are able to calculate overdraft fees.”
“Later this year there will also be new regulations on debit card income that could affect us greatly as that category is our fastest growing form of non-interest income,” Prescott wrote in the report. “We are looking at our organization to find ways to reduce expenses and potentially boost other non-interest income categories, although we do not predict any income increases that would equate to the offsetting losses we are experiencing.”
According to the bank, total loans at $427,640,000 represented an increase of 5.4 percent over the same period last year. Deposits increased by $20.6 million or 5.2 percent, to $417.4 million. Most of the deposit growth came from the bank’s Broadway office in Bangor, which opened last August, Prescott said. He added that Katahdin’s newest location in Hampden, which opened June 20, was also contributing to the deposit growth.
The Bangor branch has roughly $15 million in deposits, and Hampden has just over $1 million, teh bank reported.
Katahdin Bankshares is listed on the OTC Markets quote board OTCQB under the symbol KTHN. It was trading at $14.15 early Monday afternoon.