Bar Harbor Bankshares Acquires Dirigo Investments, Inc.; Restructured Trust Division Adds Brokerage Function.

BAR HARBOR, Maine--(BUSINESS WIRE)--October 1, 1999--

Bar Harbor Bankshares has agreed to acquire Dirigo Investments, Inc., an NASD Registered Broker Dealer firm based in Ellsworth, Maine, subject to regulatory approval. The acquisition of Dirigo will complement a restructuring of Bar Harbor Banking and Trust Company's Trust Division.

"We intend to deliver a broad array of focused investment and financial services in addition to the traditional trust services we now provide," said Sheldon F. Goldthwait, Jr., Chief Executive Officer of Bar Harbor Bankshares.

"This strategy will result in enhanced services for our customers, and will offer Bar Harbor Banking and Trust Company clients a local, high quality alternative for brokerage services," said Bonnie R. McFee, President of Dirigo Investments, Inc.

Under the restructuring plan, Bar Harbor Bankshares will form a new financial services holding company to be known as BTI Financial Group. Following its acquisition, Dirigo Investments, Inc. would become a subsidiary of BTI Financial Group and would continue to operate as a full-service discount brokerage firm. BTI Financial Group would also own and operate a Maine chartered, non-depository trust company to be known as Bar Harbor Trust Services and a newly formed SEC registered investment advisor offering portfolio management services to be known as Block Capital Management.

"To stay competitive we must offer our clients more and better choices than our competition," said Dwight L. Eaton, Chief Executive Officer and Chairman of the Board of the new holding company. "This restructuring will position us to provide more focused service to our clients and gives us the opportunity to more fully participate in a dynamic segment of the financial services industry to the betterment of our shareholders."

Bar Harbor Bankshares will seek regulatory approval for each of the three operating entities over the next 90 days. Over the next several months the headquarters of BTI Financial Group will move to Ellsworth, Maine. BTI Financial Group will maintain trust offices in Bar Harbor as well as Bangor.

Dwight L. Eaton will serve as Chief Executive Officer and Chairman of the Board of BTI Financial Group. Paul G. Ahern will serve as Executive Vice President of BTI Financial Group. Anne C. Gibson will serve as President of Block Capital Management. Frank P. Jansen will serve as President of Bar Harbor Trust Services. Bonnie R. McFee will continue to serve Dirigo's clients as President of Dirigo Investments, Inc. and will also serve as Vice Chair of the BTI Financial Group.

Bar Harbor Bankshares is a public company with shares traded on the AMEX under the symbol BHB. Bar Harbor Banking and Trust Company, a wholly owned subsidiary of Bar Harbor Bankshares, is an independent community bank with ten full-service branches and an established 112 year history as a leader in providing financial services in Eastern Maine.

Details of the acquisition will be discussed at Bar Harbor Bankshares' annual shareholders meeting on Tuesday, October 5. Members of the media are invited to attend. Please call Marlene Haskell at [phone] for more information.

Matters discussed in this press release, including the pending acquisition of Dirigo Investments Inc. and the formation of the other proposed operating subsidiaries of BTI Financial Group, include forward looking statements involving significant risks and uncertainties for which Bar Harbor Bankshares claims the protection afforded by the Private Securities Litigation Reform Act of 1995. Both the proposed acquisition of Dirigo Investments, Inc. and the proposed formation of additional operating subsidiaries are subject to regulatory approvals which have not yet been obtained. Additionally, the expected benefits of the proposed acquisition and restructuring are subject to a number of other future uncertainties including the ability of Bar Harbor Bankshares to successfully integrate the proposed new entities with its existing operations and customer base, future competition from financial institutions and others which may in the future offer competing services, future changes in state and federal laws and regulations governing financial services and securities, and the ability of existing personnel to successfully manage the proposed financial services group. Actual results could vary significantly from those suggested by such forward looking statements. More information concerning Bar Harbor Bankshares can be derived from periodic reports filed with the Securities and Exchange Commission.