Bar Harbor Bankshares Annual Meeting.

Business/Banking Editors

BAR HARBOR, Maine--(BUSINESS WIRE)--Oct. 4, 2000

Chairman of the Board of Directors, John P. Reeves, today welcomed stockholders to the Bar Harbor Bankshares Annual Meeting.

Dean S. Read, President & Chief Executive Officer of Bar Harbor Bankshares, began his address to stockholders with remarks on this year's accomplishments: a smooth transition in to the year 2000, formation of the BTI Financial Group, and the conversion of the Bank's computer operating system. Mr. Read announced that Bar Harbor Banking and Trust Company will be supplementing its service delivery channels with the mid-November introduction of internet banking.

Reporting on Bar Harbor Bankshares' balance sheet as of August 31, 2000, compared to August 31, 1999, Mr. Read noted that the Bank's loans increased $19.5 million (7.7%) to $272 million, deposits exceeded $300 million (a 2.6% increase), the investment portfolio remained relatively flat at $167 million, and borrowings from the Federal Home Loan Bank increased by $15 million to $114 million. BTI Financial Group assets under management were down slightly. Total assets increased $20 million to $475 million and stockholders equity increased $1.4 million to $49.8 million or $14.90 per share.

Mr. Read noted that while net income is $1.1 million less than a year ago, Bar Harbor Bankshares continues to be a very strong community based financial services company with earnings still stronger than many of its competitors. Mr. Read attributes the reduction in income to higher borrowing costs, a flatter yield curve, and a significant decrease in BTI's eight-month income when compared with the Trust Department's contribution from a year ago. Mr. Read expects the softening in earnings to be temporary; he cited initiatives intended to generate significant addition income in the future.

"Our mission will be to help each and every client meet their goals and dreams. We will do that by putting the clients' needs first in everything we do. If we deliver on that promise, our clients will pay us a fair price for our products and services, and our earnings growth will follow," said Mr. Read.

Paul G. Ahern, President & Chief Executive Officer of BTI Financial Group reported that the formation of the BTI Financial Group, and its subsidiary companies Bar Harbor Trust Services, Block Capital Management, and Dirigo Investments, was completed in the first quarter of this year. Dirigo Investments has recently opened a discount brokerage office in Bangor and the building in Ellsworth, which will serve as BTI's corporate headquarters, is presently under renovation. A Spring relocation is expected.

Mr. Ahern noted that the BTI Financial Group is built around the premise that Bar Harbor Bankshares can no longer meet the competition head-on with only traditional bank-based services. Clients, present and future, are demanding a broader array of financial investment services; the BTI Financial Group satisfies client brokerage, trust, and investment needs "under one roof".

Mr. Ahern noted that while he expects that the future will bring Bar Harbor Bankshares an additional non-interest related stream of income, during the first eight months of operations the BTI Financial Group incurred significant restructuring expenses. Year-to-date BTI is operating at a loss of $417,000 which is attributed to non-cash, legal, and marketing expenses.

Mr. Ahern reported that the BTI Financial Group has completed much of its organizational work and, with highly credentialed and experienced personnel now in place, is focused on business development and increasing earnings.

Bar Harbor Banking and Trust Company, an independent community bank, and BTI Financial Group, a non-depository financial services company, are wholly-owned subsidiaries of Bar Harbor Bankshares. Bar Harbor Bankshares is a public company with shares traded on the AMEX under the symbol BHB.

Matters discussed in this press release, including statements with respect to future earnings trends and the expected relocation of the headquarters of BTI Financial Group, include forward looking statements involving risks and uncertainties for which Bar Harbor Bankshares claims the protection of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. Future earnings growth is contingent on a number of factors, including general economic conditions, changes in interest rates, competition from other financial services providers, and the effectiveness of the Company's marketing programs. The expected relocation of the offices of BTI Financial Group is subject to delays in the refurbishment of its new headquarters and to other contingencies associated with the relocation of a business office. More information concerning Bar Harbor Bankshares can be derived from its periodic reports filed with the Securities and Exchange Commission, including Form 10Q as filed for the quarter ended March 31, 2000.