| Maine(State      or other jurisdiction of incorporation or organization)            | 01-0425066(I.R.S.      Employer Identification No.) |
|-------------------------------------------------------------------------------------|-----------------------------------------------------|
| 500 Canal Street,      Lewiston, Maine(Address      of principal executive offices) | 04240(Zip      Code)                                |
| Registrant's      telephone number, including area code:                            | (207)      786-3245                                 |

| Title of each      class:          | Name of each exchange      on which registered: |
|------------------------------------|-------------------------------------------------|
| Common      Stock, $1.00 par value | NASDAQ                                          |

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TABLE OF CONTENT

| Part      I.  |               |                                                                                                                   |
|---------------|--------------------|------------------------------------------------------------------------------------------------------------------------|
|          | Item      1.       | Business                                                                                                               |
|          |               |                                                                                                                   |
|          | Item 1.a.     | Risk Factors                                                                                                           |
|          |               |                                                                                                                   |
|          | Item      2.       | Properties                                                                                                             |
|          |               |                                                                                                                   |
|          | Item      3.       | Legal Proceedings                                                                                                      |
|          |               |                                                                                                                   |
|          | Item      4.       | Submission of Matters to a Vote of Security      Holders                                                               |
|          |               |                                                                                                                   |
| Part      II  |               |                                                                                                                   |
|          | Item      5.  | Market for Registrant’s Common Equity, Related Stockholder      Matters and Issuer Purchase of Equity Securities |
|          |               |                                                                                                                   |
|          | Item      6.  | Selected Financial Data                                                                                                |
|          |               |                                                                                                                   |
|          | Item      7.       | Management's Discussion and Analysis of Results of      Operations and Financial Condition                             |
|          |               |                                                                                                                   |
|          | Item7.a.      | Quantitative and Qualitative Disclosure about Market      Risk                                                         |
|          |               |                                                                                                                   |
|          | Item      8.       | Financial Statements and Supplementary    Data                                                                         |
|          | Item      8.a.     | Financial Statements Required by Regulation      S-X                                                                   |
|          |               |                                                                                                                   |
|          |               | Report of Independent Registered Public Accounting      Firm                                                           |
|          |               |                                                                                                                   |
|          |               | Consolidated Balance SheetsJune      30, 2008 and 2007                                                                 |
|          |               |                                                                                                                   |
|          |               | Consolidated Statements of IncomeYears      Ended June 30, 2008, 2007 and 2006                                         |
|          |               |                                                                                                                   |
|          |               | Consolidated Statements of Changes in Stockholders'      EquityYears      Ended June 30, 2008, 2007 and 2006           |
|          |               |                                                                                                                   |
|          |               | Consolidated Statements of Cash FlowsYears      Ended June 30, 2008, 2007 and 2006                                     |
|          |               |                                                                                                                   |
|          |               | Notes to Consolidated Financial      Statements                                                                        |
|          |               |                                                                                                                   |
|          | Item      8.b.     | Statistical Disclosures Required by Industry Guide      3                                                              |
|          |               |                                                                                                                   |
|          | Item      9.       | Changes in and Disagreements with Accountants on Accounting      and Financial Disclosure                              |
|          |               |                                                                                                                   |
|          | Item      9.a      | Controls and Procedures                                                                                                |
|          |               |                                                                                                                   |
|          | Item      9.b      | Other Information                                                                                                      |
|          |               |                                                                                                                   |
| Part      III |               |                                                                                                                   |
|          | Item      10.      | Director and Executive Officers of the      Registrant                                                                 |
|          |               |                                                                                                                   |
|          | Item      11.      | Executive Compensation                                                                                                 |
|          |               |                                                                                                                   |
|          | Item      12.      | Security Ownership of Certain Beneficial Owners and      Management and Related Stockholders                           |
|          |               |                                                                                                                   |
|          | Item      13.      | Certain Relationships and Related      Transactions                                                                    |
|          |               |                                                                                                                   |
|          | Item      14.      | Principal Accountant Fees and  Services                                                                                |
|          |               |                                                                                                                   |
| Part      IV  |               |                                                                                                                   |
|          | Item      15.      | Exhibits and Financial Statement    Schedules                                                                          |

----

| Document                                                               | Form 10-K Reference      Location |
|------------------------------------------------------------------------|-----------------------------------|
| Proxy      Statement for the 2008 Annual Meeting of  Shareholders | III                               |

Item 1.  Business

| ·   | employees      with local decision-makingauthority; |
|--------------------|-----------------------------------------------------|

| ·   | employees      who are familiar with the customers' needs, their business environment and      competitive demands; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------|

| ·   | employees      who are able to develop and customize personalized financial solutions      that are tailored to the customer'sneeds. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

| ·   | allow      bank holding companies that qualify as "a financial holding company" to      engage in a substantially broader range of activities that are financial      in nature; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | allow      insurers and other financial service companies to acquire      banks; |
|--------------------|----------------------------------------------------------------------------------|

| ·   | remove      various restrictions that apply to bank holding company ownership of      securities firms and mutual fund advisory companies;  and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | establish      the overall regulatory structure applicable to bank holding companies that      also engage in insurance and securities  operations. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|                                | Total      Risk-based Capital Ratio | Tier      1 Risk-based Capital Ratio | Leverage      Ratio                                                                   | Other                                                                                                                         |
|-------------------------------------|-------------------------------------|--------------------------------------|---------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------|
| Well      Capitalized               | 10%      or greater                 | 6%      or greater                   | 5%      or greater                                                                    | Not      subject to any order or written directive to meet and maintain a specific      capital level for any capital measure |
| Adequately      Capitalized         | 8%      or greater                  | 4%      or greater                   | 4%      or greater (3% in the case of a bank with a composite CAMEL rating of      1) |                                                                                                                          |
| Undercapitalized                    | less      than 8%                   | less      than 4%                    | less      than 4% ((3% in the case of a bank with a composite CAMEL rating of      1) |                                                                                                                          |
| Significantly      Undercapitalized | less      than 6%                   | less      than 3%                    | less      than 3%                                                                     |                                                                                                                          |
| Critically      Undercapitalized    |                                |                                 |                                                                                  | Ratio      of tangible equity to total assets is less than or equal to    2%                                                  |

----

----

| ·   | the      creation of an independent accounting oversight board to oversee the audit      of public companies and auditors who perform such  audits; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | auditor      independence provisions which restrict non-audit services that independent      accountants may provide to their audit clients; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | additional      responsibilities regarding financial statements for the chief executive      officer and chief financial officer of the reporting    entity; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a      prohibition on personal loans to directors and officers, except certain      loans made by financial institutions on non-preferential terms and in      compliance with other bank regulatory  requirements; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | additional      corporate governance and responsibility measures which (a) require the      chief executive officer and chief financial officer to certify financial      statements and to forfeit salary and bonuses in certain situations, and      (b) protect whistleblowers andinformants; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | enhance      independence and expertise requirements of members of audit      committees; |
|--------------------|-------------------------------------------------------------------------------------------|

| ·   | expansion      of the audit committee's authority and responsibility by requiring that      the audit committee (a) have direct control of the outside auditor, (b) be      able to hire and fire the auditor, and (c) approve all non-audit      services; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | mandatory      disclosure by analysts of potential conflicts of interest;    and |
|--------------------|----------------------------------------------------------------------------------|

| ·   | enhanced      penalties for fraud and otherviolations. |
|--------------------|--------------------------------------------------------|

----

| a) | general      economic conditions, either nationally or in the markets where the Company      or its subsidiaries offer their financial products or services, may be      less favorable than expected, resulting in, among other things, a      deterioration of credit quality or in a decreased demand      for  our products or services;                           |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| b) | A      significant increase in competitive pressures in the banking and financial      services industry and, more particularly, a significant increase in      competition in the Company's market areas as described under "Business --      Market for Services and Competition";                                                                                             |
| c) | changes      in the interest rate environment which could reduce our margins and      increase defaults in our loan portfolio, including those described under      "Management's Discussion and Analysis of Results of Operations and      Financial Condition --Risk Management", and also may have a negative      impact on the Company's interest rate exchange  agreement; |
| d) | the      adequacy of the allowance for loan losses and the Bank's asset quality,      including those matters described in "Management's Discussion and Analysis      of Results of Operations and Financial Condition -- Results of      Operations";                                                                                                                           |
| e) | changes      in political conditions or changes occurring in the legislative or      regulatory environment that adversely affects the businesses in which we      are engaged, including the impact of any changes in laws and regulations      relating to banking, securities, taxes, and insurance;                                                                          |
| f) | changes      in technology;                                                                                                                                                                                                                                                                                                                                                      |
| g) | the      ability to increase market share and to control expenses, and changes in      consumer spending, borrowing, and saving habits;                                                                                                                                                                                                                                          |
| h) | changes      in trade, tax, monetary, or fiscal policies, including the interest rate      policies of the FRB;                                                                                                                                                                                                                                                                  |
| i) | money      market and monetary fluctuations, and changes in inflation or in the      securities markets;                                                                                                                                                                                                                                                                         |
| j) | future      acquisitions and the integration of acquired businesses and      assets;                                                                                                                                                                                                                                                                                             |
| k) | changes      in the Company's organizational structure and in its compensation and      benefit plans, including those necessitated by pressures in the labor      market for attracting and retaining qualifiedpersonnel;                                                                                                                                                       |
| l) | the      effect of changes in accounting policies and practices, as may be adopted      by regulatory agencies as well as the Financial Accounting Standards      Board;                                                                                                                                                                                                         |
| m) | unanticipated      litigation, regulatory, or other judicial proceedings;                                                                                                                                                                                                                                                                                                        |
| n) | the      success of the Company at managing the risks involved in the      foregoing;                                                                                                                                                                                                                                                                                            |
| o) | other      one-time events, risks and uncertainties detailed from time to time in the      filings of the Company with the Securities and Exchange Commission;      and                                                                                                                                                                                                          |
| p) | continue      deversification of income streams.                                                                                                                                                                                                                                                                                                                                 |

----

ITEM 1.a. RiskFactors

----

Item 2.  Properties

----

| Branch      Locations                                                                                                          | Ownership       |
|--------------------------------------------------------------------------------------------------------------------------------|-----------------|
| 232      Center Street, Auburn                                                                                                 | Lease      (1)  |
| 235      Western Avenue, Augusta                                                                                               | Fee      Simple |
| 11      Main Street, Bethel                                                                                                    | Fee      Simple |
| 168      Maine Street, Brunswick                                                                                               | Fee      Simple |
| 2      Depot Street, Buckfield                                                                                                 | Fee      Simple |
| 46      Main Street, Harrison                                                                                                  | Fee      Simple |
| 882      Lisbon Street, Lewiston                                                                                               | Lease      (2)  |
| 500      Canal Street, Lewiston                                                                                                | Lease      (3)  |
| 26      Pleasant Street, Mechanic Falls                                                                                        | Fee      Simple |
| 77      Middle Street, Portland                                                                                                | Lease      (4)  |
| 235      Main Street, South Paris                                                                                              | Fee      Simple |
|                                                                                                                           |
| Insurance Agency      Locations                                                                                                |            |
| 59      Main Street, Anson, Maine                                                                                              | Fee      Simple |
| 232      Center Street, Auburn, Maine*                                                                                         | Lease      (1)  |
| 235      Western Avenue, Augusta, Maine*                                                                                       | Fee      Simple |
| 4      Sullivan Square, Berwick, Maine                                                                                         | Lease      (5)  |
| 11      Main Street, Bethel, Maine*                                                                                            | Fee      Simple |
| 346      Main Street, Jackman, Maine                                                                                           | Lease      (6)  |
| 28      Main Street, Livermore Falls, Maine                                                                                    | Lease      (7)  |
| 89      Main Street, Mexico, Maine                                                                                             | Fee      Simple |
| 2568      Main Street, Rangeley, Maine                                                                                         | Fee      Simple |
| 59      South Main Street, Rochester, New Hampshire                                                                            | Lease      (8)  |
| 423      U. S. Route 1, Scarborough, Maine                                                                                     | Lease      (9)  |
| 235      Main Street, South Paris, Maine*                                                                                      | Fee      Simple |
| 472      Main Street, Thomaston, Maine                                                                                         | Lease      (10) |
| 10      Snell Hill Road, Turner, Maine                                                                                         | Fee      Simple |
|                                                                                                                           |
| *Each      of these insurance agency locations are situated in an existing bank      branch location at the address indicated. |
|                                                                                                                           |
| (1)      Lease term is ten years and expires May 1, 2016.                                                                      |
| (2)      Lease term is 15 years and expires January 14, 2014.                                                                  |
| (3)      Lease term is 15 years and expires July 15, 2020.                                                                     |
| (4)      Lease term is five years and expires September 30,2012.                                                               |
| (5)      Lease term is 21 years and expires December 31 2028.                                                                  |
| (6)      Lease term is one year and automatically renews in September each      year.                                          |
| (7)      Lease is a tenant at will.                                                                                            |
| (8)      Lease term is one year and automatically renews in December each      year.                                      |
| (9)      Lease term is three years and expires July 31, 2010.                                                                  |
| (10)      Lease is a tenant at will.                                                                                           |

Item 3.  LegalProceedings

----

Item 4.  Submission of Matters to aVote of Security Holders

| Name                    | Age | Position with Company      and/or Bank         |
|-------------------------|-----|------------------------------------------------|
| James      D. Delamater | 57  | President      and Chief Executive Officer (1) |
| Pender      J. Lazenby  | 58  | Chief      Risk Officer                        |
| Marcel      Blais       | 49  | Chief      Operating Officer                   |
| Robert      S. Johnson  | 56  | Chief      Financial Officer (1)               |
| Suzanne      Carney     | 41  | Clerk                                          |

Item 5.  Market for Registrant'sCommon Equity, Related Stockholder Matters and Issuer Purchase of EquitySecurities

| 2007 –      2008 | High  | Low   | Div      Pd |
|------------------------|-------|-------|-------------|
| Jul      1- Sep 30     | 18.63 | 15.82 | .090        |
| Oct      1 - Dec 31    | 17.30 | 13.72 | .090        |
| Jan      1 - Mar 31    | 15.53 | 13.31 | .090        |
| Apr      1 - Jun 30    | 14.79 | 11.17 | .090        |

| 2006 -      2007    | High  | Low   | Div      Pd |
|---------------------|-------|-------|-------------|
| Jul      1- Sep 30  | 21.39 | 19.18 | .090        |
| Oct      1 - Dec 31 | 19.77 | 18.20 | .090        |
| Jan      1 - Mar 31 | 20.30 | 18.34 | .090        |
| Apr      1 - Jun 30 | 18.89 | 16.60 | .090        |

----

| Unregistered Sales of      Equity Securities and Use of Proceeds The      following table provides the information on any purchase made by or on      behalf of the Company of shares of Northeast Bancorp common stock during      the indicated periods. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    Period      (1)                                                                                                                                                                                                                               |  Total      NumberOf      SharesPurchased      (2) |   Average      PricePaid per      Share | Total      Number of Shares      Purchasedas      Part of PubliclyAnnounced      Program | Maximum      Number ofShares      that May Yet bePurchased      UnderThe Program      (3) |
| Apr.      1 – Apr. 30                                                                                                                                                                                                                                     | - | - | - | 58,400 |
| May      1 – May 31                                                                                                                                                                                                                                       | - | - | - | 58,400 |
| Jun.      1 – Jun. 30                                                                                                                                                                                                                                     | - | - | - | 58,400 |
| (1)                                                                                                                                                                                                                                                             | Based      on trade date, not settlement date. |
| (2)                                                                                                                                                                                                                                                             | Represents      shares purchased in open-market transactions pursuant to the Company's      2006 Stock Repurchase Plan. |
| (3)                                                                                                                                                                                                                                                             | On      December 15, 2006, the Company announced that its Board of Directors      of the Company approved the 2006 Stock Repurchase Plan pursuant to which      the Company is authorized to repurchase in open-market transactions up to      200,000 shares from time to time until the plan expires on December 31,      2008, unless extended. |

----

| Item 6. Selected Financial      Data                                                                                                    |   |                                                  |    |   |   |   |    |   |   |   |    |   |   |   |    |
|-----------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|
|                                                                                                                                    |   | At      or for the Year                               |    |
|                                                                                                                                    |   | Ended June 30,                                        |    |
|                                                                                                                                    |   | 2008                                                  |    |   | 2007   |   |    | 2006   |   |   | 2005    |   |   | 2004   |    |
|                                                                                                                                    |   | (Dollars      in thousands except for Per Share Data) |    |
| Selected      operations data:                                                                                                          |   |                                                  |    |   |   |   |    |   |   |   |    |   |   |   |    |
|        Interest income                                                                                                             |   | $                                                     | 35,398  |   |   | $      | 35,682  |   |   | $      | 35,456  |   |   | $      | 32,674  |   |   | $ | 28,124 |   |
|        Interest expense                                                                                                            |   |                                                  | 21,051  |   |   |   | 20,097  |   |   |   | 16,761  |   |   |   | 13,967  |   |   |   | 12,079 |   |
|                                                                                                                                    |   |                                                  |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|        Net interest income                                                                                                         |   |                                                  | 14,347  |   |   |   | 15,585  |   |   |   | 18,695  |   |   |   | 18,707  |   |   |   | 16,045 |   |
|                                                                                                                                    |   |                                                  |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|        Provision for loan losses                                                                                                   |   |                                                  | 836     |   |   |   | 989     |   |   |   | 1,226   |   |   |   | 1,302   |   |   |   | 962 |   |
|        Other operating income (1)                                                                                                  |   |                                                  | 10,510  |   |   |   | 7,903   |   |   |   | 6,578   |   |   |   | 5,083   |   |   |   | 4,670 |   |
|        Net securities gains                                                                                                        |   |                                                  | 293     |   |   |   | 42      |   |   |   | 17      |   |   |   | 68      |   |   |   | 201 |   |
|        Other operating expenses (2)                                                                                                |   |                                                  | 21,855  |   |   |   | 20,075  |   |   |   | 18,209  |   |   |   | 16,684  |   |   |   | 14,799 |   |
|                                                                                                                                    |   |                                                  |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|        Income before income taxes                                                                                                  |   |                                                  | 2,459   |   |   |   | 2,466   |   |   |   | 5,855   |   |   |   | 5,872   |   |   |   | 5,155 |   |
|        Income tax expense                                                                                                          |   |                                                  | 528     |   |   |   | 579     |   |   |   | 1,851   |   |   |   | 1,853   |   |   |   | 1,643 |   |
|                                                                                                                                    |   |                                                  |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|        Net income                                                                                                                  |   | $                                                     | 1,931   |   |   | $      | 1,887   |   |   | $      | 4,004   |   |   | $      | 4,019   |   |   | $ | 3,512 |   |
|                                                                                                                                    |   |                                                  |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Consolidated      per share data:                                                                                                       |   |                                                  |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|        Net income:                                                                                                                 |   |                                                  |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|         Basic                                                                                                                 |   | $                                                     | 0.82    |   |   | $      | 0.77    |   |   | $      | 1.61    |   |   | $      | 1.60    |   |   | $ | 1.38 |   |
|         Diluted                                                                                                               |   | $                                                     | 0.82    |   |   | $      | 0.76    |   |   | $      | 1.59    |   |   | $      | 1.57    |   |   | $ | 1.35 |   |
|        Cash dividends                                                                                                              |   | $                                                     | 0.36    |   |   | $      | 0.36    |   |   | $      | 0.36    |   |   | $      | 0.36    |   |   | $ | 0.35 |   |
| Selected      balance sheet data:                                                                                                       |   |                                                  |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|        Total assets                                                                                                                |   | $                                                     | 598,274 |   |   | $      | 556,801 |   |   | $      | 562,918 |   |   | $      | 575,900 |   |   | $ | 538,754 |   |
|        Loans receivable                                                                                                            |   |                                                  | 409,194 |   |   |   | 425,571 |   |   |   | 435,663 |   |   |   | 461,052 |   |   |   | 432,594 |   |
|        Deposits                                                                                                                    |   |                                                  | 363,374 |   |   |   | 364,554 |   |   |   | 395,293 |   |   |   | 396,219 |   |   |   | 377,820 |   |
|        Borrowings                                                                                                                  |   |                                                  | 186,830 |   |   |   | 147,564 |   |   |   | 124,860 |   |   |   | 136,293 |   |   |   | 121,443 |   |
|        Total stockholders' equity                                                                                                  |   |                                                  | 40,273  |   |   |   | 40,850  |   |   |   | 39,096  |   |   |   | 39,870  |   |   |   | 36,453 |   |
| Other      ratios:                                                                                                                      |   |                                                  |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|        Return on average assets                                                                                                    |   |                                                  | 0.33    | %      |   |   | 0.34    | %      |   |   | 0.70    | %      |   |   | 0.71    | % |   |   | 0.71 | % |
|        Return on average equity                                                                                                    |   |                                                  | 4.63    | %      |   |   | 4.59    | %      |   |   | 9.95    | %      |   |   | 10.39   | % |   |   | 9.50 | % |
|        Average equity to average total assets                                                                                      |   |                                                  | 7.23    | %      |   |   | 7.37    | %      |   |   | 7.07    | %      |   |   | 6.86    | % |   |   | 7.51 | % |
|        Common dividend payout ratio                                                                                                |   |                                                  | 44.10   | %      |   |   | 46.77   | %      |   |   | 22.40   | %      |   |   | 22.65   | % |   |   | 25.93 | % |
|                                                                                                                                    |   |                                                  |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| (1)      Includes primarily fees for deposit, investment brokerage and trust      services to customers and gains on the sale of loans. |
| (2)      Includes salaries, employee benefits, occupancy, equipment and other      expenses.                                            |

Item7.   Management's Discussion and Analysis of Results ofOperations and Financial Condition

----

----

| ·   | Three      insurance agencies were acquired in twelve months ended June 30,      2008. |
|--------------------|----------------------------------------------------------------------------------------|

| ·   | Revenues      from our investment brokerage, insurance, and trust and wealth management      divisions increased by 28%. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------|

| ·   | Net      interest margins decreased to 270 basis points compared to 299 basis      points in fiscal 2007, which resulting in a decrease in net interest      income.  Total earning assets increased $11.3 million as a      result of a leverage strategy implemented in fiscal 2008 to slow the      decrease in net interestincome. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      Company and the Bank are “well capitalized” under regulatory      definitions.  Risk based capital and leverage rations decreased      compared to the prior year due to the recording of goodwill and other      intangible assets resulting from the insurance agency      acquisitions. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      allowance for loan losses decreased by $100,000 in fiscal 2008, to      $5,656,000, and, as a percentage of total loans, increased in fiscal 2008      to 1.38% compared to 1.35% in fiscal 2007 as total loans decreased      $16.4 million in fiscal 2008. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Net      income increased to $1,931,289 for fiscal 2008 compared to $1,886,677 for      fiscal 2007, an increase of$44,612. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------|

----

| Rate/Volume      Analysis for the Year EndedJune      30, 2008 versus June 30, 2007 |   |
|-------------------------------------------------------------------------------------|--------|
|                                                                                |   |   |   |   |   |   |
|                                                                                |   | Difference      Due to |   |   |   |   |
|                                                                                |   | Volume |   |   | Rate |   |   | Total |   |
| Investments                                                                         |   | $ | 1,574,259 |   |   | $ | 335,033 |   |   | $ | 1,909,292 |   |
| Loans,      net                                                                     |   |   | (1,334,395 | )  |   |   | (760,382 | )  |   |   | (2,094,777 | )  |
| FHLB      deposits & other                                                      |   |   | (68,000 | )  |   |   | (28,650 | )  |   |   | (96,650 | )  |
|   Total      interest-earning assets                                      |   |   | 171,864 |   |   |   | (453,999 | )  |   |   | (282,135 | )  |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                            |   |   | (549,860 | )  |   |   | 149,563 |   |   |   | (400,297 | )  |
| Repurchase      agreements                                                          |   |   | (68,165 | )  |   |   | (192,329 | )  |   |   | (260,494 | )  |
| Borrowings                                                                          |   |   | 1,818,309 |   |   |   | (203,511 | )  |   |   | 1,614,798 |   |
|   Total      interest-bearing liabilities                                 |   |   | 1,200,284 |   |   |   | (246,277 | )  |   |   | 954,007 |   |
|    Net      interest income                                          |   | $ | (1,028,420 | )  |   | $ | (207,722 | )  |   | $ | (1,236,142 | )  |

----

----

| Rate/Volume      Analysis for the Year EndedJune      30, 2007 versus June 30, 2006 |   |
|-------------------------------------------------------------------------------------|--------|
|                                                                                |   |   |   |   |   |   |
|                                                                                |   | Difference      Due to |   |   |   |   |
|                                                                                |   | Volume |   |   | Rate |   |   | Total |   |
| Investments                                                                         |   | $ | 131,492 |   |   | $ | 375,969 |   |   | $ | 507,461 |   |
| Loans,      net                                                                     |   |   | (1,075,851 | )  |   |   | 799,395 |   |   |   | (276,456 | )  |
| FHLB      deposits & other                                                      |   |   | 33,336 |   |   |   | 42,035 |   |   |   | 75,371 |   |
|   Total      interest-earning assets                                      |   |   | (911,023 | )  |   |   | 1,217,399 |   |   |   | 306,376 |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                            |   |   | (437,192 | )  |   |   | 2,775,059 |   |   |   | 2,337,867 |   |
| Repurchase      agreements                                                          |   |   | 154,571 |   |   |   | 422,677 |   |   |   | 577,248 |   |
| Borrowings                                                                          |   |   | 42,110 |   |   |   | 379,167 |   |   |   | 421,277 |   |
|   Total      interest-bearing liabilities                                 |   |   | (240,511 | )  |   |   | 3,576,903 |   |   |   | 3,336,392 |   |
|    Net      interest income                                          |   | $ | (670,512 | )  |   | $ | (2,359,504 | )  |   | $ | (3,030,016 | )  |

----

----

----

|                      |   | Consumer      Loans |        |   |            |   |
|---------------------------|--------|---------------------|-------------|--------|-----------------|--------|
|                      |   | June      30, 2008  |        |   | %      of Total |   |   | June      30, 2007 |   |   | %      of Total |   |
| Indirect      Auto        |   | $                   | 34,980,847  |   |            |   | 30 | %  |   | $ | 36,808,246 |   |   |   | 31 | %  |
| Indirect      RV          |   |                | 54,915,583  |   |            |   | 47 | %  |   |   | 51,611,223 |   |   |   | 43 | %  |
| Indirect      Mobile Home |   |                | 21,759,537  |   |            |   | 18 | %  |   |   | 24,961,562 |   |   |   | 21 | %  |
| Subtotal      Indirect    |   |                | 111,655,967 |   |            |   | 95 | % |   |   | 113,381,031 |   |   |   | 95 | % |
| Other                     |   |                | 5,390,792   |   |            |   | 5 | %  |   |   | 5,499,692 |   |   |   | 5 | %  |
| Total                     |   | $                   | 117,046,759 |   |            |   | 100 | % |   | $ |  118,880,723 |   |   |   | 100 | % |

----

| Brokered      time deposits                  | $ 136,972,000             | Subject      to policy limitation of 25% of total assets                     |
|----------------------------------------------|-------------------------------------|------------------------------------------------------------------------------|
| Federal      Home Loan Bank of Boston        | $   25,008,000  | Unused      advance capacity subject to eligible and qualified    collateral |
| Fed      Discount Window Borrower-in-Custody | $   25,029,000  | Unused      credit line subject to the pledge of indirect autoloans          |
| Total      Unused Borrowing Capacity         | $ 187,009,000             |                                                                         |

----

| 06/30/08 | 06/30/07 | 06/30/06 | 06/30/05 |
|----------|----------|----------|----------|
| 3.64%    | 2.90%    | 2.09%    | 1.09%    |

| Description                           |   | June      30, 2008 |      |   | June      30, 2007 |   |
|---------------------------------------|--------|--------------------|-----------|--------|--------------------|--------|
| Residential      real estate          |   | $                  | 1,390,000 |   |               | $      | 477,000 |   |
| Commercial      real estate           |   |               | 2,358,000 |   |               |   | 2,033,000 |   |
| Construction      loans               |   |               | 101,000   |   |               |   | - |   |
| Commercial      loans                 |   |               | 3,214,000 |   |               |   | 2,104,000 |   |
| Consumer      and other               |   |               | 640,000   |   |               |   | 476,000 |   |
|   Total      non-performing |   | $                  | 7,703,000 |   |               | $      | 5,090,000 |   |

----

----

|               | Up 200 Basis      Points | Down      100 Basis      Points |
|--------------------|--------------------------|--------------------------------------|
| June      30, 2008 | -1.38%                   | 2.00%                                |
|               |                     |                                 |
|               | Up 200 Basis      Points | Down 200 Basis      Points           |
| June      30, 2007 | -1.80%                   | 4.60%                                |

| Affiliated Trusts                   |   | Trust Preferred Securities |       |   | Common Securities |   |    | Junior Subordinated    Debentures |   |   | Interest Rate |   | Maturity Date |
|-------------------------------------|--------|----------------------------|------------|--------|-------------------|--------|---------|-----------------------------------|--------|--------|---------------|--------|---------------|
| NBN      Capital Trust II           |   | $                          | 3,000,000  |   |              | $      | 93,000  |                              |   | $      | 3,093,000     |   |          |   | 5.60 | % | March      30, 2034 |
| NBN      Capital Trust III          |   |                       | 3,000,000  |   |              |   | 93,000  |                              |   |   | 3,093,000     |   |          |   | 6.50 | % | March      30, 2034 |
| NBN      Capital Trust IV           |   |                       | 10,000,000 |   |              |   | 310,000 |                              |   |   | 10,310,000    |   |          |   | 5.88 | % | February      23, 2035 |
|      Total |   | $                          | 16,000,000 |   |              | $      | 496,000 |                              |   | $      | 16,496,000    |   |          |   | 5.94 | % |   |

----

|   |   | Payments      Due by Period |
|--------|--------|-----------------------------|

|  Contractual      Obligations                               |   | Total  |        |   | Less      Than1 Year |   |       | 1-3Years |   |   | 4-5Years   |   |   | After      5Years |       |
|------------------------------------------------------------------|--------|--------|-------------|--------|----------------------|--------|------------|----------|--------|--------|------------|--------|--------|-------------------|------------|
| FHLB      advances                                               |   | $      | 90,575,000  |   |                 | $      | 55,575,000 |     |   | $      | 5,000,000  |   |   | $                 | 15,000,000 |   |   | $ | 15,000,000 |   |
| Structured      Repurchase Agreements                            |   |   | 40,000,000  |   |                 |   | -          |     |   |   | 40,000,000 |   |   |              | -          |   |   |   | - |   |
| Junior      subordinated debentures                              |   |   | 16,496,000  |   |                 |   | 6,186,000  |     |   |   | 10,310,000 |   |   |              | -          |   |   |   | - |   |
| Capital      lease obligation                                    |   |   | 2,891,022   |   |                 |   | 147,843    |     |   |   | 319,610    |   |   |              | 354,306    |   |   |   | 2,069,263 |   |
| Other      borrowings                                            |   |   | 4,026,885   |   |                 |   | 763,067    |     |   |   | 1,130,186  |   |   |              | 1,090,878  |   |   |   | 1,042,754 |   |
|      Total      long-term debt          |   |   | 153,988,907 |   |                 |   | 62,671,910 |     |   |   | 56,759,796 |   |   |              | 16,445,184 |   |   |   | 18,112,017 |   |
|                                                             |   |   |        |   |                 |   |       |     |   |   |       |   |   |              |       |   |   |   |   |   |
| Operating      lease obligations                                 |   |   | 2,109,748   |   |                 |   | 458,557    |     |   |   | 791,825    |   |   |              | 553,109    |   |   |   | 306,257 |   |
|      Total      contractual obligations |   | $      | 156,098,655 |   |                 | $      | 63,130,468 |     |   | $      | 57,551,620 |   |   | $                 | 16,998,293 |   |   | $ | 18,418,274 |   |

|                                               |   |   |       |   |                                              |   |
|----------------------------------------------------|--------|--------|------------|--------|---------------------------------------------------|--------|
|                                               |   |   |       |   | Amount      of Commitment Expiration - Per Period |   |
| Commitments      with off-balance sheet risk       |   | Total  |       |   | Less      Than1 Year                              |   |   | 1-3Years |   |   | 4-5Years |   |   | After      5Years |   |
| Commitments      to extend credit (1)(3)           |   | $      | 18,991,000 |   |                                              | $      | 18,991,000 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Commitments      related to loans held for sale(2) |   |   | 943,000    |   |                                              |   | 943,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Unused      lines of credit (3)(4)                 |   |   | 44,915,000 |   |                                              |   | 18,400,000 |   |   |   | 2,681,000 |   |   |   | 3,445,000 |   |   |   | 20,389,000 |   |
| Standby      letters of credit (5)                 |   |   | 1,113,000  |   |                                              |   | 1,113,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                               |   | $      | 65,962,000 |   |                                              | $      | 39,447,000 |   |   | $ | 2,681,000 |   |   | $ | 3,445,000 |   |   | $ | 20,389,000 |   |

| (1) | Represents      commitments outstanding for residential real estate, commercial real      estate, and commercial loans.                                          |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Commitments      of residential real estate loans that will be held for    sale.                                                                                 |
| (3) | Loan      commitments and unused lines of credit for commercial and construction      loans that expire or are subject to renewal in twelve months or      less. |
| (4) | Represents      unused lines of credit from commercial, construction, and home equity      loans.                                                                |
| (5) | Standby      letters of credit generally expiring in twelve  months.                                                                                             |

----

| Item 7.a .                                                                                                                                                                                                                                                                           | Quantitative and      Qualitative Disclosure about Market Risk |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------|
| See      Item 7 of our Form 10-K, "Management's Discussion and Analysis of      Financial Condition and Results of Operations  - Risk      Management" and accompanying table set forth therein for quantitative and      qualitative disclosures about market risk.  |
| Item 8.                                                                                                                                                                                                                                                                              | Financial Statements      and Supplementary Data               |
|             a.                                                                                                                                                                                                           | Financial Statements Required by Regulation      S-X           |

----

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM

|                             | /s/      Shatswell,      MacLeod & Company, P.C.                            |
|----------------------------------|---------------------------------------------------------------------------------|
| West      Peabody, Massachusetts |       Shatswell,      MacLeod & Company, P.C. |
| September      18, 2008          |                                                                            |

----

CONSOLIDATED BALANCE SHEETS

| ASSETS                                                                                                               |   |
|----------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                 |   | 2008     |   |   | 2007     |   |
| Cash      and due from banks                                                                                         |   | $ | 9,077,012 |   |   | $ | 9,065,330 |   |
| Interest-bearing      deposits                                                                                       |   |   | 3,466,969 |   |   |   | 1,676,391 |   |
| Total      cash and cash equivalents                                                                                 |   |   | 12,543,981 |   |   |   | 10,741,721 |   |
|                                                                                                                 |   |   |   |   |   |   |   |   |
| Available-for-sale      securities, at fair value                                                                    |   |   | 134,482,977 |   |   |   | 86,348,070 |   |
| Loans      held-for-sale                                                                                             |   |   | 485,580 |   |   |   | 1,636,485 |   |
|                                                                                                                 |   |   |   |   |   |   |   |   |
| Loans      receivable                                                                                                |   |   | 409,193,969 |   |   |   | 425,571,418 |   |
| Less      allowance for loan losses                                                                                  |   |   | 5,656,000 |   |   |   | 5,756,000 |   |
| Net      loans                                                                                                       |   |   | 403,537,969 |   |   |   | 419,815,418 |   |
|                                                                                                                 |   |   |   |   |   |   |   |   |
| Premises      and equipment - net                                                                                    |   |   | 8,683,569 |   |   |   | 7,545,430 |   |
| Acquired      assets - net                                                                                           |   |   | 678,350 |   |   |   | - |   |
| Accrued      interest receivable                                                                                     |   |   | 2,291,314 |   |   |   | 2,586,720 |   |
| Federal      Home Loan Bank stock, at cost                                                                           |   |   | 4,889,400 |   |   |   | 4,825,700 |   |
| Federal      Reserve Bank stock, at cost                                                                             |   |   | 471,500 |   |   |   | 471,500 |   |
| Goodwill                                                                                                             |   |   | 4,390,340 |   |   |   | 2,880,803 |   |
| Intangible      assets, net of accumulated amortization of $1,642,140 in  2008      and $1,031,483 in 2007 |   |   | 8,444,424 |   |   |   | 4,110,081 |   |
| Bank      owned life insurance (BOLI)                                                                                |   |   | 12,292,216 |   |   |   | 9,844,584 |   |
| Other      assets                                                                                                    |   |   | 5,082,030 |   |   |   | 5,994,468 |   |
|                                                                                                                 |   |   |   |   |   |   |   |   |
| Total      assets                                                                                                    |   | $ | 598,273,650 |   |   | $ | 556,800,980 |   |

| LIABILITIES AND      STOCKHOLDERS' EQUITY                                                                                                                                                  |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                       |   | 2008 |   |   | 2007 |   |
| Liabilities:                                                                                                                                                                               |   |   |   |   |   |   |
| Deposits                                                                                                                                                                                   |   |   |   |   |   |   |
| Demand                                                                                                                                                                                     |   | $ | 35,142,661 |   |   | $ | 36,332,604 |   |
| NOW                                                                                                                                                                                        |   |   | 47,977,659 |   |   |   | 53,405,241 |   |
| Money      market                                                                                                                                                                          |   |   | 22,160,816 |   |   |   | 8,053,552 |   |
| Regular      savings                                                                                                                                                                       |   |   | 19,905,507 |   |   |   | 21,145,567 |   |
| Brokered      time deposits                                                                                                                                                                |   |   | 12,596,615 |   |   |   | 22,546,163 |   |
| Certificates      of deposit under $100,000                                                                                                                                                |   |   | 147,252,982 |   |   |   | 154,972,970 |   |
| Certificates      of deposit $100,000 or more                                                                                                                                              |   |   | 78,337,531 |   |   |   | 68,097,680 |   |
| Total      deposits                                                                                                                                                                        |   |   | 363,373,771 |   |   |   | 364,553,777 |   |
|                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
| Federal      Home Loan Bank advances                                                                                                                                                       |   |   | 90,575,000 |   |   |   | 93,016,698 |   |
| Structured      repurchase agreements                                                                                                                                                      |   |   | 40,000,000 |   |   |   | - |   |
| Short-term      borrowings                                                                                                                                                                 |   |   | 32,840,837 |   |   |   | 33,105,377 |   |
| Junior      subordinated debentures issued to affiliated trusts                                                                                                                            |   |   | 16,496,000 |   |   |   | 16,496,000 |   |
| Capital      lease obligation                                                                                                                                                              |   |   | 2,891,022 |   |   |   | 2,653,511 |   |
| Other      borrowings                                                                                                                                                                      |   |   | 4,026,885 |   |   |   | 2,292,163 |   |
| Due      to broker                                                                                                                                                                         |   |   | 4,934,931 |   |   |   | - |   |
| Other      liabilities                                                                                                                                                                     |   |   | 2,861,892 |   |   |   | 3,833,576 |   |
| Total      liabilities                                                                                                                                                                     |   |   | 558,000,338 |   |   |   | 515,951,102 |   |
|                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
| Commitments      and contingent liabilities                                                                                                                                                |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
| Stockholders'      equity                                                                                                                                                                  |   |   |   |   |   |   |   |   |
| Preferred      stock, $1.00 par value, 1,000,000 shares authorized; none      issued                                                                                                       |   |   | - |   |   |   | - |   |
| Common      stock, at stated value, 15,000,000 shares      authorized;  2,315,182 and 2,448,832 shares   outstanding      at June 30, 2008 and 2007, respectively |   |   |   2,315,182 |   |   |   |   2,448,832 |   |
| Additional      paid-in capital                                                                                                                                                            |   |   | 2,582,270 |   |   |   | 4,715,164 |   |
| Retained      earnings                                                                                                                                                                     |   |   | 36,679,932 |   |   |   | 35,600,428 |   |
| Accumulated      other comprehensive loss                                                                                                                                                  |   |   | (1,304,072 | ) |   |   | (1,914,546 | ) |
|                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
| Total      stockholders' equity                                                                                                                                                            |   |   | 40,273,312 |   |   |   | 40,849,878 |   |
|                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
| Total      liabilities and stockholders' equity                                                                                                                                            |   | $ | 598,273,650 |   |   | $ | 556,800,980 |   |
|                                                                                                                                                                                       |   |
| The      accompanying notes are an integral part of these consolidated financial      statements.                                                                                          |   |

----

CONSOLIDATED STATEMENTS OF INCOME

|                                                                             |   | 2008   |       |   | 2007   |   |       | 2006   |   |
|----------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Interest      and dividend income:                                               |   |   |       |   |   |   |       |   |   |
| Interest      and fees on loans                                                  |   | $      | 29,271,770 |   |   | $      | 31,366,547 |   |   | $ | 31,643,003 |   |
| Interest      on Federal Home Loan Bank overnight deposits                       |   |   | 36,012     |   |   |   | 152,805    |   |   |   | 93,017 |   |
| Taxable      interest on available-for-sale securities                           |   |   | 5,106,019  |   |   |   | 3,154,072  |   |   |   | 2,947,224 |   |
| Tax-exempt      interest on available-for-sale securities                        |   |   | 448,378    |   |   |   | 442,311    |   |   |   | 264,839 |   |
| Dividends      on available-for-sale securities                                  |   |   | 151,481    |   |   |   | 140,954    |   |   |   | 130,605 |   |
| Dividends      on Federal Home Loan Bank and Federal Reserve Bank    stock  |   |   | 306,668    |   |   |   | 368,463    |   |   |   | 335,900 |   |
| Other      interest and dividend income                                          |   |   | 77,346     |   |   |   | 57,203     |   |   |   | 41,620 |   |
|                                                                             |   |   |       |   |   |   |       |   |   |   |   |   |
| Total      interest and dividend income                                          |   |   | 35,397,674 |   |   |   | 35,682,355 |   |   |   | 35,456,208 |   |
|                                                                             |   |   |       |   |   |   |       |   |   |   |   |   |
| Interest      expense:                                                           |   |   |       |   |   |   |       |   |   |   |   |   |
| Deposits                                                                         |   |   | 13,089,876 |   |   |   | 13,490,173 |   |   |   | 11,152,306 |   |
| Federal      Home Loan Bank advances                                             |   |   | 3,747,221  |   |   |   | 3,819,550  |   |   |   | 3,482,655 |   |
| Structured      repurchase agreements                                            |   |   | 1,503,778  |   |   |   | -          |   |   |   | - |   |
| Short-term      borrowings                                                       |   |   | 1,244,442  |   |   |   | 1,504,936  |   |   |   | 927,688 |   |
| Junior      subordinated debentures issued to affiliated trusts                  |   |   | 1,064,964  |   |   |   | 1,080,538  |   |   |   | 1,063,681 |   |
| FRB      borrower-in-custody                                                     |   |   | 8,007      |   |   |   | -          |   |   |   | - |   |
| Obligation      under capital lease agreements                                   |   |   | 149,453    |   |   |   | 136,726    |   |   |   | 130,583 |   |
| Other      borrowings                                                            |   |   | 243,264    |   |   |   | 65,075     |   |   |   | 3,693 |   |
|                                                                             |   |   |       |   |   |   |       |   |   |   |   |   |
| Total      interest expense                                                      |   |   | 21,051,005 |   |   |   | 20,096,998 |   |   |   | 16,760,606 |   |
|                                                                             |   |   |       |   |   |   |       |   |   |   |   |   |
| Net      interest and dividend income before provision for loan      losses |   |   | 14,346,669 |   |   |   | 15,585,357 |   |   |   | 18,695,602 |   |
|                                                                             |   |   |       |   |   |   |       |   |   |   |   |   |
| Provision      for loan losses                                                   |   |   | 836,484    |   |   |   | 989,158    |   |   |   | 1,226,413 |   |
|                                                                             |   |   |       |   |   |   |       |   |   |   |   |   |
| Net      interest and dividend income after provision for loan      losses  |   |   | 13,510,185 |   |   |   | 14,596,199 |   |   |   | 17,469,189 |   |
|                                                                             |   |   |       |   |   |   |       |   |   |   |   |   |
| Noninterest      income:                                                         |   |   |       |   |   |   |       |   |   |   |   |   |
| Fees      and service charges on loans                                           |   |   | 94,371     |   |   |   | 79,885     |   |   |   | 97,630 |   |
| Fees      for other services to customers                                        |   |   | 1,094,043  |   |   |   | 1,042,648  |   |   |   | 1,114,081 |   |
| Net      securities gains                                                        |   |   | 293,101    |   |   |   | 42,349     |   |   |   | 17,335 |   |
| Gain      on sales of loans                                                      |   |   | 555,707    |   |   |   | 869,255    |   |   |   | 308,777 |   |
| Investment      commissions                                                      |   |   | 2,222,935  |   |   |   | 2,385,118  |   |   |   | 1,769,300 |   |
| Insurance      commissions                                                       |   |   | 5,364,280  |   |   |   | 2,330,435  |   |   |   | 1,916,822 |   |
| BOLI      income                                                                 |   |   | 457,198    |   |   |   | 388,613    |   |   |   | 366,939 |   |
| Other                                                                            |   |   | 721,589    |   |   |   | 806,524    |   |   |   | 1,003,997 |   |
|                                                                             |   |   |       |   |   |   |       |   |   |   |   |   |
| Total      noninterest income                                                    |   |   | 10,803,224 |   |   |   | 7,944,827  |   |   |   | 6,594,881 |   |
|                                                                             |   |   |       |   |   |   |       |   |   |   |   |   |

| Noninterest      expense:                                                                         |   |   |       |   |   |   |       |   |   |
|---------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Salaries      and employee benefits                                                               |   |   | 13,019,398 |   |   |   | 12,022,037 |   |   |   | 10,637,758 |   |
| Occupancy      expense                                                                            |   |   | 1,792,827  |   |   |   | 1,722,381  |   |   |   | 1,672,505 |   |
| Equipment      expense                                                                            |   |   | 1,587,297  |   |   |   | 1,531,276  |   |   |   | 1,440,238 |   |
| Intangible      assets amortization                                                               |   |   | 610,657    |   |   |   | 314,584    |   |   |   | 241,028 |   |
| Other                                                                                             |   |   | 4,844,275  |   |   |   | 4,484,908  |   |   |   | 4,216,975 |   |
|                                                                                              |   |   |       |   |   |   |       |   |   |   |   |   |
| Total      noninterest expense                                                                    |   |   | 21,854,454 |   |   |   | 20,075,186 |   |   |   | 18,208,504 |   |
|                                                                                              |   |   |       |   |   |   |       |   |   |   |   |   |
|            Income      before income taxes |   |   | 2,458,955  |   |   |   | 2,465,840  |   |   |   | 5,855,566 |   |
|                                                                                              |   |   |       |   |   |   |       |   |   |   |   |   |
| Income      tax expense                                                                           |   |   | 527,666    |   |   |   | 579,163    |   |   |   | 1,851,367 |   |
|                                                                                              |   |   |       |   |   |   |       |   |   |   |   |   |
| Net      income                                                                                   |   | $      | 1,931,289  |   |   | $      | 1,886,677  |   |   | $ | 4,004,199 |   |
|                                                                                              |   |   |       |   |   |   |       |   |   |   |   |   |
| Earnings      per common share:                                                                   |   |   |       |   |   |   |       |   |   |   |   |   |
| Basic                                                                                             |   | $      | 0.82       |   |   | $      | 0.77       |   |   | $ | 1.61 |   |
| Diluted                                                                                           |   | $      | 0.82       |   |   | $      | 0.76       |   |   | $ | 1.59 |   |
|                                                                                              |   |
| The      accompanying notes are an integral part of these consolidated financial      statements. |   |

----

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'EQUITY

|                                                                                                                                                                                                                         |  Preferred       Stock |            |   |  Common Stock |   |            | AdditionalPaid-in Capital |   |   |  Retained Earnings |    |   | AccumulatedOtherComprehensive Loss |            |   |    Total |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------|-----------------|--------|-------------------------|--------|-----------------|--------------------------------|--------|--------|------------------------------|---------|--------|-----------------------------------------|-----------------|--------|-------------------------|--------|
| Balance      at June 30, 2005                                                                                                                                                                                                | $                                | -               |   |                    | $      | 2,519,832       |                           |   | $      | 6,530,836                    |    |   | $                                       | 31,489,092      |   |                    | $      | (670,187 | ) |   | $ | 39,869,573 |   |
|                                                                                                                                                                                                                         |                             |            |   |                    |   |            |                           |   |   |                         |    |   |                                    |            |   |                    |   |   |   |   |   |   |   |
| Net      income                                                                                                                                                                                                              |                             | -               |   |                    |   | -               |                           |   |   | -                            |    |   |                                    | 4,004,199       |   |                    |   | - |   |   |   | 4,004,199 |   |
| Other      comprehensive income net of tax:  Net      unrealized losses on      investments      available-for-sale,     net      of reclassification adjustment |                             |     - |   |                    |   |     - |                           |   |   |     -              |    |   |                                    |     - |   |                    |   | (1,952,282 | ) |   |   | (1,952,282 | ) |
|  Total      comprehensive income                                                                                                                                                                                        |                             | -               |   |                    |   | -               |                           |   |   | -                            |    |   |                                    | -               |   |                    |   | - |   |   |   | 2,051,917 |   |
|                                                                                                                                                                                                                         |                             |            |   |                    |   |            |                           |   |   |                         |    |   |                                    |            |   |                    |   |   |   |   |   |   |   |
| Purchase      of 90,200 shares of     Company      stock                                                                                                                                            |                             | -               |   |                    |   | (90,200         | )                         |   |   | (2,052,050                   | )  |   |                                    | -               |   |                    |   | - |   |   |   | (2,142,250 | ) |
| Stock      options exercised                                                                                                                                                                                                 |                             | -               |   |                    |   | 17,500          |                           |   |   | 196,472                      |    |   |                                    | -               |   |                    |   | - |   |   |   | 213,972 |   |
| Dividends      on common stock    at $0.36      per share                                                                                                                                                |                             | -               |   |                    |   | -               |                           |   |   | -                            |    |   |                                    | (897,087        | )      |                    |   | - |   |   |   | (897,087 | ) |
|                                                                                                                                                                                                                         |                             |            |   |                    |   |            |                           |   |   |                         |    |   |                                    |            |   |                    |   |   |   |   |   |   |   |
| Balance      at June 30, 2006                                                                                                                                                                                                |                             | -               |   |                    |   | 2,447,132       |                           |   |   | 4,675,258                    |    |   |                                    | 34,596,204      |   |                    |   | (2,622,469 | ) |   |   | 39,096,125 |   |
|                                                                                                                                                                                                                         |                             |            |   |                    |   |            |                           |   |   |                         |    |   |                                    |            |   |                    |   |   |   |   |   |   |   |
| Net      income                                                                                                                                                                                                              |                             | -               |   |                    |   | -               |                           |   |   | -                            |    |   |                                    | 1,886,677       |   |                    |   | - |   |   |   | 1,886,677 |   |
| Other      comprehensive income net of tax:  Net      unrealized gain on     investments      available-for-sale,     net      of reclassification adjustment         |                             |     - |   |                    |   |     - |                           |   |   |     -              |    |   |                                    |     - |   |                    |   |     707,923 |   |   |   |     707,923 |   |
|  Total      comprehensive income                                                                                                                                                                                        |                             | -               |   |                    |   | -               |                           |   |   | -                            |    |   |                                    | -               |   |                    |   | - |   |   |   | 2,594,600 |   |
|                                                                                                                                                                                                                         |                             |            |   |                    |   |            |                           |   |   |                         |    |   |                                    |            |   |                    |   |   |   |   |   |   |   |
| Purchase      of 3,800 shares of   Company      stock                                                                                                                                                              |                             | -               |   |                    |   | (3,800          | )                    |   |   | (64,144                      | )  |   |                                    | -               |   |                    |   | - |   |   |   | (67,944 | ) |
| Stock      options exercised                                                                                                                                                                                                 |                             | -               |   |                    |   | 500             |                           |   |   | 6,050                        |    |   |                                    | -               |   |                    |   | - |   |   |   | 6,550 |   |
| Common      stock issued in   connection with the purchase      of    branch real estate                                                                                        |                             | -               |   |                    |   | 5,000           |                           |   |   | 98,000                       |    |   |                                    | -               |   |                    |   | - |   |   |   | 103,000 |   |
| Dividends      on common stock   at $0.36      per share                                                                                                                                                      |                             | -               |   |                    |   | -               |                           |   |   | -                            |    |   |                                    | (882,453        | )      |                    |   | - |   |   |   | (882,453 | ) |
|                                                                                                                                                                                                                         |                             |            |   |                    |   |            |                           |   |   |                         |    |   |                                    |            |   |                    |   |   |   |   |   |   |   |
| Balance      at June 30, 2007                                                                                                                                                                                                |                             | -               |   |                    |   | 2,448,832       |                           |   |   | 4,715,164                    |    |   |                                    | 35,600,428      |   |                    |   | (1,914,546 | ) |   |   | 40,849,878 |   |
|                                                                                                                                                                                                                         |                             |            |   |                    |   |            |                           |   |   |                         |    |   |                                    |            |   |                    |   |   |   |   |   |   |   |
| Net      income                                                                                                                                                                                                              |                             | -               |   |                    |   | -               |                           |   |   | -                            |    |   |                                    | 1,931,289       |   |                    |   | - |   |   |   | 1,931,289 |   |
| Other      comprehensive income net of tax:  Net      unrealized gain on    investments      available-for-sale,     net      of reclassification adjustment               |                             |     - |   |                    |   |     - |                           |   |   |     -              |    |   |                                    |     - |   |                    |   |     610,474 |   |   |   |     610,474 |   |
| Total      comprehensive income                                                                                                                                                                                              |                             | -               |   |                    |   | -               |                           |   |   | -                            |    |   |                                    | -               |   |                    |   | - |   |   |   | 2,541,763 |   |
|                                                                                                                                                                                                                         |                             |            |   |                    |   |            |                           |   |   |                         |    |   |                                    |            |   |                    |   |   |   |   |   |   |   |
| Purchase      of 137,800 shares of   Company stock                                                                                                                                                                 |                             | -               |   |                    |   | (137,800        | )                    |   |   | (2,176,530                   | )  |   |                                    | -               |   |                    |   | - |   |   |   | (2,314,330 | ) |
| Stock      options exercised                                                                                                                                                                                                 |                             | -               |   |                    |   | 4,000           |                           |   |   | 41,125                       |    |   |                                    | -               |   |                    |   | - |   |   |   | 45,125 |   |
| Stock      grant                                                                                                                                                                                                             |                             | -               |   |                    |   | 150             |                           |   |   | 2,511                        |    |   |                                    | -               |   |                    |   | - |   |   |   | 2,661 |   |
| Dividends      on common stock   at $0.36      per share                                                                                                                                                      |                             | -               |   |                    |   | -               |                           |   |   | -                            |    |   |                                    | (851,785        | )      |                    |   | - |   |   |   | (851,785 | ) |
|                                                                                                                                                                                                                         |                             |            |   |                    |   |            |                           |   |   |                         |    |   |                                    |            |   |                    |   |   |   |   |   |   |   |
| Balance      at June 30, 2008                                                                                                                                                                                                | $                                | -               |   |                    | $      | 2,315,182       |                           |   | $      | 2,582,270                    |    |   | $                                       | 36,679,932      |   |                    | $      | (1,304,072 | ) |   | $ | 40,273,312 |   |
|                                                                                                                                                                                                                         |                             |            |   |                    |   |            |                           |   |
| The      accompanying notes are an integral part of these consolidated financial      statements.                                                                                                                            |

----

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                                                          |   | 2008   |        |   | 2007   |   |        | 2006   |   |
|-------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|-------------|--------|--------|
| Cash      flows from operating activities:                                                                                    |   |   |        |   |   |   |        |   |   |
| Net      income                                                                                                               |   | $      | 1,931,289   |   |   | $      | 1,886,677   |   |   | $ | 4,004,199 |   |
| Adjustments      to reconcile net income to net cash  provided      by operating activities:                        |   |   |        |   |   |   |        |   |   |   |   |   |
| Provision      for loan losses                                                                                                |   |   | 836,484     |   |   |   | 989,158     |   |   |   | 1,226,413 |   |
| Provision      for losses on acquired assets                                                                                  |   |   | -           |   |   |   | 6,384       |   |   |   | 2,500 |   |
| Provision      made for deferred compensation                                                                                 |   |   | 132,111     |   |   |   | 276,539     |   |   |   | 399,845 |   |
| Write-down      of available-for-sale securities                                                                              |   |   | 147,247     |   |   |   | 50,442      |   |   |   | 38,394 |   |
| Write-down      of non-marketable securities                                                                                  |   |   | 47,020      |   |   |   | 248,482     |   |   |   | 42,257 |   |
| Deferred      income tax expense (benefit)                                                                                    |   |   | 218,579     |   |   |   | (329,268    | )      |   |   | (323,220 | ) |
| BOLI      income, net                                                                                                         |   |   | (447,632    | )      |   |   | (349,258    | )      |   |   | (366,939 | ) |
| Depreciation      of premises and equipment                                                                                   |   |   | 1,121,573   |   |   |   | 1,088,373   |   |   |   | 1,048,529 |   |
| Amortization      of intangible assets                                                                                        |   |   | 610,657     |   |   |   | 314,584     |   |   |   | 241,028 |   |
| Net      gain on sale of available-for-sale securities                                                                        |   |   | (293,101    | )      |   |   | (42,349     | )      |   |   | (17,335 | ) |
| Net      (gain) loss on disposals, writedowns and sale of      fixed assets                                              |   |   | -           |   |   |   | (73,962     | )      |   |   | 128,363 |   |
| Gain      on sale of deposits                                                                                                 |   |   | -           |   |   |   | -           |   |   |   | (500,845 | ) |
| Net      change of loans held-for-sale                                                                                        |   |   | 1,150,905   |   |   |   | (955,342    | )      |   |   | (362,293 | ) |
| Stock      grant                                                                                                              |   |   | 2,661       |   |   |   | -           |   |   |   | - |   |
| Other                                                                                                                         |   |   | (29,611     | )      |   |   | 27,839      |   |   |   | 21,962 |   |
| Change      in other assets and liabilities:                                                                                  |   |   |        |   |   |   |        |   |   |   |   |   |
| Interest      receivable                                                                                                      |   |   | 295,406     |   |   |   | 91,838      |   |   |   | (123,669 | ) |
| Other      assets and liabilities                                                                                             |   |   | (771,442    | )      |   |   | 49,756      |   |   |   | 106,976 |   |
|                                                                                                                          |   |   |        |   |   |   |        |   |   |   |   |   |
| Net      cash provided by operating activities                                                                                |   |   | 4,952,146   |   |   |   | 3,279,893   |   |   |   | 5,566,165 |   |
|                                                                                                                          |   |   |        |   |   |   |        |   |   |   |   |   |
| Cash      flows from investing activities:                                                                                    |   |   |        |   |   |   |        |   |   |   |   |   |
| Federal      Reserve Bank stock purchased                                                                                     |   |   | -           |   |   |   | (12,000     | )      |   |   | (54,000 | ) |
| Federal      Home Loan Bank stock purchased                                                                                   |   |   | (63,700     | )      |   |   | -           |   |   |   | - |   |
| Proceeds      from redemption of Federal Home Loan Bank stock                                                                 |   |   | -           |   |   |   | 672,600     |   |   |   | 1,146,200 |   |
| Proceeds      from the sales of available-for-sale securities                                                                 |   |   | 16,035,767  |   |   |   | 2,290,571   |   |   |   | 1,354,098 |   |
| Purchases      of available-for-sale securities                                                                               |   |   | (78,435,328 | )      |   |   | (14,720,181 | )      |   |   | (25,311,089 | ) |
| Proceeds      from maturities and principal payments  on      available-for-sale securities                         |   |   | 20,300,010  |   |   |   | 13,255,927  |   |   |   | 9,078,452 |   |
| Loan      originations and principal collections, net                                                                         |   |   | 14,762,615  |   |   |   | 9,361,953   |   |   |   | 24,729,918 |   |
| Purchases      of premises and equipment                                                                                      |   |   | (1,873,282  | )      |   |   | (1,373,474  | )      |   |   | (1,111,469 | ) |
| Proceeds      from sales of premises and equipment                                                                            |   |   | -           |   |   |   | 246,610     |   |   |   | - |   |
| Proceeds      from sales of acquired assets                                                                                   |   |   | -           |   |   |   | 4,000       |   |   |   | 244,722 |   |
| Purchase      of BOLI                                                                                                         |   |   | (2,000,000  | )      |   |   | (600,000    | )      |   |   | - |   |
| Cash      paid in connection with acquisition of  insurance      agencies                                           |   |   | (3,740,363  | )      |   |   | (2,471,002  | )      |   |   | - |   |
|                                                                                                                          |   |   |        |   |   |   |        |   |   |   |   |   |
| Net      cash (used) provided by investing activities                                                                         |   |   | (35,014,281 | )      |   |   | 6,655,004   |   |   |   | 10,076,832 |   |
|                                                                                                                          |   |   |        |   |   |   |        |   |   |   |   |   |
| Cash      flows from financing activities:                                                                                    |   |   |        |   |   |   |        |   |   |   |   |   |
| Net      (decrease) increase in deposits                                                                                      |   |   | (1,180,006  | )      |   |   | (30,739,600 | )      |   |   | 7,267,169 |   |
| Cash      paid on sale of deposits                                                                                            |   |   | -           |   |   |   | -           |   |   |   | (7,691,669 | ) |
| Advances      from the Federal Home Loan Bank                                                                                 |   |   | 22,000,000  |   |   |   | 43,000,000  |   |   |   | 105,000,000 |   |
| Repayment      of advances from the Federal Home Loan Bank                                                                    |   |   | (39,056,698 | )      |   |   | (36,831,900 | )      |   |   | (115,309,004 | ) |
| Net      advances on Federal Home Loan Bank overnight advances                                                                |   |   | 14,615,000  |   |   |   | 10,960,000  |   |   |   | - |   |
| Structured      repurchase agreement proceeds                                                                                 |   |   | 40,000,000  |   |   |   | -           |   |   |   | - |   |
| Net      (decrease) increase in short-term borrowings                                                                         |   |   | (264,540    | )      |   |   | 3,467,951   |   |   |   | (3,741,986 | ) |
| Dividends      paid                                                                                                           |   |   | (851,785    | )      |   |   | (882,453    | )      |   |   | (897,087 | ) |
| Company      stock purchased                                                                                                  |   |   | (2,314,330  | )      |   |   | (67,944     | )      |   |   | (2,142,250 | ) |
| Issuance      of common stock                                                                                                 |   |   | 45,125      |   |   |   | 6,550       |   |   |   | 213,972 |   |
| Repayment      on debt from insurance agencies acquisitions                                                                   |   |   | (990,882    | )      |   |   | (81,966     | )      |   |   | - |   |
| Repayment      on capital lease obligation                                                                                    |   |   | (137,489    | )      |   |   | (127,535    | )      |   |   | (111,656 | ) |
|                                                                                                                          |   |   |        |   |   |   |        |   |   |   |   |   |
| Net      cash provided (used) by financing activities                                                                         |   |   | 31,864,395  |   |   |   | (11,296,897 | )      |   |   | (17,412,511 | ) |
|                                                                                                                          |   |   |        |   |   |   |        |   |   |   |   |   |
| Net      increase (decrease) in cash and cash equivalents                                                                     |   |   | 1,802,260   |   |   |   | (1,362,000  | )      |   |   | (1,769,514 | ) |
|                                                                                                                          |   |   |        |   |   |   |        |   |   |   |   |   |
| Cash      and cash equivalents, beginning of year                                                                             |   |   | 10,741,721  |   |   |   | 12,103,721  |   |   |   | 13,873,235 |   |
|                                                                                                                          |   |   |        |   |   |   |        |   |   |   |   |   |
| Cash      and cash equivalents, end of year                                                                                   |   | $      | 12,543,981  |   |   | $      | 10,741,721  |   |   | $ | 12,103,721 |   |
|                                                                                                                          |   |   |        |   |   |   |        |   |   |   |   |   |
| Supplemental      schedule of cash flow information:                                                                          |   |   |        |   |   |   |        |   |   |   |   |   |
| Interest      paid                                                                                                            |   | $      | 20,900,773  |   |   | $      | 20,120,234  |   |   | $ | 16,872,352 |   |
| Income      taxes paid                                                                                                        |   |   | 540,000     |   |   |   | 819,500     |   |   |   | 2,220,561 |   |
|                                                                                                                          |   |   |        |   |   |   |        |   |   |   |   |   |
| Supplemental      schedule of noncash investing and  financing      activities:                                     |   |   |        |   |   |   |        |   |   |   |   |   |
| Transfer      from loans to acquired assets and other real    estate owned                                               |   | $      | 678,350     |   |   | $      | -           |   |   | $ | 173,800 |   |
| Change      in valuation allowance for unrealized gains (losses)  on      available-for-sale securities, net of tax |   |   | 610,474     |   |   |   | 707,923     |   |   |   | (1,952,282 | ) |
| Net      change in deferred taxes for unrealized (gains) losses  on      available-for-sale securities              |   |   | (314,486    | )      |   |   | (364,689    | )      |   |   | 1,005,701 |   |
| Transfer      from loan loss allowance to other liabilities  for      off balance sheet credit risk                 |   |   | -           |   |   |   | -           |   |   |   | 204,086 |   |
| Capital      lease asset and related obligation                                                                               |   |   | 375,000     |   |   |   | -           |   |   |   | 2,892,702 |   |
| Stock      issued in branch purchase                                                                                          |   |   | -           |   |   |   | 103,000     |   |   |   | - |   |
| Other      borrowings and goodwill reductions related to acquisition                                                          |   |   | 98,332      |   |   |   | -           |   |   |   | - |   |
|                                                                                                                          |   |
| The      accompanying notes are an integral part of these consolidated financial      statements.                             |   |

----

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

----

----

|                                                   |   |     |      |   | Customer    |   |      |        |   |   | Total        |   |
|--------------------------------------------------------|--------|----------|-----------|--------|-------------|--------|-----------|-------------|--------|--------|--------------|--------|
|                                                   |   |     |      |   | List        |   |      | Non-compete |   |   | Identifiable |   |
|                                                   |   | Goodwill |      |   | Intangibles |   |      | Intangibles |   |   | Intangibles  |   |
| Balance,      June 30, 2006                            |   | $        | 407,897   |   |        |   | 1,890,516 |        |   |   | 29,149       |   |   |   | 1,919,665 |   |
| Recorded      during the year                          |   |     | 2,472,906 |   |        |   | 1,970,000 |        |   |   | 535,000      |   |   |   | 2,505,000 |   |
| Amortization      expense                              |   |     | -         |   |        |   | (268,560  | )           |   |   | (46,024      | )      |   |   | (314,584 | ) |
| Other      adjustment of purchase accounting estimates |   |     | -         |   |        |   | -         |        |   |   | -            |   |   |   | - |   |
| Balance,      June 30, 2007                            |   |     | 2,880,803 |   |        |   | 3,591,956 |        |   |   | 518,125      |   |   |   | 4,110,081 |   |
| Recorded      during the year                          |   |     | 1,545,110 |   |        |   | 3,905,000 |        |   |   | 1,100,000    |   |   |   | 5,005,000 |   |
| Amortization      expense                              |   |     | -         |   |        |   | (510,401  | )           |   |   | (100,256     | )      |   |   | (610,657 | ) |
| Reclassification                                       |   |     | 60,000    |   |        |   | (60,000   | )           |   |   | -            |   |   |   | (60,000 | ) |
| Other      adjustment of purchase accounting estimates |   |     | (95,573   | )      |        |   | -         |        |   |   | -            |   |   |   | - |   |
| Balance,      June 30, 2008                            |   | $        | 4,390,340 |   |        |   | 6,926,555 |        |   |   | 1,517,869    |   |   |   | 8,444,424 |   |

| Estimated      Annual Amortization Expense, years ending June 30: |   |   |    |
|-------------------------------------------------------------------|--------|--------|---------|
| 2009                                                              |   | $      | 717,524 |   |
| 2010                                                              |   |   | 692,124 |   |
| 2011                                                              |   |   | 692,124 |   |
| 2012                                                              |   |   | 692,124 |   |
| 2013                                                              |   |   | 692,124 |   |

| The      components of identifiable intangible assets follow: |   |                |       |   |         |   |      |              |   |
|---------------------------------------------------------------|--------|---------------------|------------|--------|--------------|--------|-----------|-------------------|--------|
|                                                          |   | June      30, 2008  |       |
|                                                          |   | Gross      Carrying |       |   | Accumulated  |   |      | Net      Carrying |   |
|                                                          |   | Amount              |       |   | Amortization |   |      | Amount            |   |
| Indentifiable      intangible assets:                         |   |                |       |   |         |   |      |              |   |
| Customer      list intangibles                                |   | $                   | 8,201,564  |   |         |   | 1,275,009 |              |   |   | 6,926,555 |   |
| Non-compete      intangibles                                  |   |                | 1,885,000  |   |         |   | 367,131   |              |   |   | 1,517,869 |   |
| Total                                                         |   | $                   | 10,086,564 |   |         |   | 1,642,140 |              |   |   | 8,444,424 |   |
|                                                          |   |                |       |   |         |   |      |              |   |   |   |   |

|                                  |   | June      30, 2007  |      |
|---------------------------------------|--------|---------------------|-----------|
|                                  |   | Gross      Carrying |      |   | Accumulated |   |   | Net      Carrying |   |
|                                  |   | Amount              |      |   | Amortization |   |   | Amount |   |
| Indentifiable      intangible assets: |   |                |      |   |   |   |   |   |   |
| Customer      list intangibles        |   | $                   | 4,356,564 |   |   |   | 764,608 |   |   |   | 3,591,956 |   |
| Non-compete      intangibles          |   |                | 785,000   |   |   |   | 266,875 |   |   |   | 518,125 |   |
| Total                                 |   | $                   | 5,141,564 |   |   |   | 1,031,483 |   |   |   | 4,110,081 |   |

----

----

|                                                                                                        |   | 2008                       |        |   | 2007                        |   |
|-------------------------------------------------------------------------------------------------------------|--------|----------------------------|-------------|--------|-----------------------------|--------|
|                                                                                                        |   | AmortizedCost              |        |   | Fair Value             |   |   | AmortizedCost |   |   | Fair Value |   |
| Debt      securities issued by U.S. Government-sponsored      enterprises                              |   | $                          | 1,394,087   |   |                        |   |  1,313,124 |   |   |   |  21,765,732 |   |   |   |  21,158,409 |   |
| Mortgage-backed      securities                                                                             |   |                       | 120,695,852 |   |                        |   | 119,600,353 |   |   |   | 53,987,824 |   |   |   | 52,138,732 |   |
| Municipal      bonds                                                                                        |   |                       | 11,274,516  |   |                        |   | 11,112,247 |   |   |   | 11,067,197 |   |   |   | 10,709,069 |   |
| Corporate      bonds                                                                                        |   |                       | 500,000     |   |                        |   | 481,768 |   |   |   | 500,000 |   |   |   | 484,625 |   |
| Equity      securities                                                                                      |   |                       | 2,594,389   |   |                        |   | 1,975,485 |   |   |   | 1,928,144 |   |   |   | 1,857,235 |   |
|                                                                                                        |   |                       |        |   |                        |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                        |   | $                          | 136,458,844 |   |                        |   | 134,482,977 |   |   |   | 89,248,897 |   |   |   | 86,348,070 |   |
|                                                                                                        |   |
| The      gross unrealized gains and unrealized losses on available-for-sale      securities are as follows: |   |
|                                                                                                        |   |
|                                                                                                        |   | 2008                       |        |   | 2007                        |   |
|                                                                                                        |   | GrossUnrealized Gains |        |   | GrossUnrealized Losses |   |   | GrossUnrealized Gains |   |   | GrossUnrealized Losses |   |
| Debt      securities issued by U. S. Government-sponsored      enterprises                             |   | $                          | 6,239       |   |                        |   |  87,202 |   |   |   |  - |   |   |   |  607,323 |   |
| Mortgage-backed      securities                                                                             |   |                       | 394,927     |   |                        |   | 1,490,426 |   |   |   | 2,818 |   |   |   | 1,851,910 |   |
| Municipal      bonds                                                                                        |   |                       | 272         |   |                        |   | 162,541 |   |   |   | - |   |   |   | 358,128 |   |
| Corporate      bonds                                                                                        |   |                       | -           |   |                        |   | 18,232 |   |   |   | - |   |   |   | 15,375 |   |
| Equity      securities                                                                                      |   |                       | 2,396       |   |                        |   | 621,300 |   |   |   | 18,661 |   |   |   | 89,570 |   |
|                                                                                                        |   |                       |        |   |                        |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                        |   | $                          | 403,834     |   |                        |   | 2,379,701 |   |   |   | 21,479 |   |   |   | 2,922,306 |   |

----

|                                                        |   | Less than 12 Months |       |   | More than 12 Months    |   |           | Total           |   |
|-------------------------------------------------------------|--------|---------------------|------------|--------|------------------------|--------|----------------|-----------------|--------|
|                                                        |   | Fair Value     |       |   | Unrealized Losses |   |           | Fair Value |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |
| June      30, 2008:                                         |   |                |       |   |                   |   |           |            |   |   |   |   |   |   |   |   |   |   |
| U.S.      Government-sponsored        enterprises |   | $                   |  -    |   |                   |   |    - |            |   |   |    905,009 |   |   |   |    87,202 |   |   |   |    905,009 |   |   |   |    87,202 |   |
| Mortgage-backed securities                             |   |                | 79,631,910 |   |                   |   | 1,444,686      |            |   |   | 965,826 |   |   |   | 45,740 |   |   |   | 80,597,736 |   |   |   | 1,490,426 |   |
| Municipal      bonds                                        |   |                | 10,709,579 |   |                   |   | 162,541        |            |   |   | - |   |   |   | - |   |   |   | 10,709,579 |   |   |   | 162,541 |   |
| Corporate      bonds                                        |   |                | 481,768    |   |                   |   | 18,232         |            |   |   | - |   |   |   | - |   |   |   | 481,768 |   |   |   | 18,232 |   |
| Equity      securities                                      |   |                | 1,348,236  |   |                   |   | 340,571        |            |   |   | 550,093 |   |   |   | 280,729 |   |   |   | 1,898,329 |   |   |   | 621,300 |   |
|                                                        |   |                |       |   |                   |   |           |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                        |   | $                   | 92,171,493 |   |                   |   | 1,966,030      |            |   |   | 2,420,928 |   |   |   | 413,671 |   |   |   | 94,592,421 |   |   |   | 2,379,701 |   |

| June      30, 2007:                                         |   |   |          |   |   |   |               |   |   |   |                    |   |   |   |                 |   |   |   |
|-------------------------------------------------------------|--------|--------|---------------|--------|--------|--------|--------------------|--------|--------|--------|-------------------------|--------|--------|--------|----------------------|--------|--------|--------|
| U.S.      Government-sponsored        enterprises |   | $      |  391,296 |   |   |   |    9,828 |   |   |   |    20,767,113 |   |   |   |    597,495 |   |   |   |    21,158,409 |   |   |   |    607,323 |   |
| Mortgage-backed securities                             |   |   | 22,180,625    |   |   |   | 463,353            |   |   |   | 27,327,140              |   |   |   | 1,388,557            |   |   |   | 49,507,765 |   |   |   | 1,851,910 |   |
| Municipal      bonds                                        |   |   | 7,945,475     |   |   |   | 262,497            |   |   |   | 2,763,594               |   |   |   | 95,631               |   |   |   | 10,709,069 |   |   |   | 358,128 |   |
| Corporate      bonds                                        |   |   | -             |   |   |   | -                  |   |   |   | 484,625                 |   |   |   | 15,375               |   |   |   | 484,625 |   |   |   | 15,375 |   |
| Equity      securities                                      |   |   | 839,368       |   |   |   | 49,720             |   |   |   | 630,039                 |   |   |   | 39,850               |   |   |   | 1,469,407 |   |   |   | 89,570 |   |
|                                                        |   |   |          |   |   |   |               |   |   |   |                    |   |   |   |                 |   |   |   |   |   |   |   |   |   |
|                                                        |   | $      | 31,356,764    |   |   |   | 785,398            |   |   |   | 51,972,511              |   |   |   | 2,136,908            |   |   |   | 83,329,275 |   |   |   | 2,922,306 |   |

|                                      |   | 2008   |       |   | 2007   |   |
|-------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                      |   |
| Net      unrealized losses                |   | $      | (1,975,867 | )      |   |   | (2,900,827 | ) |
| Deferred      tax effect                  |   |   | 671,795    |   |   |   | 986,281 |   |
|                                      |   |
| Accumulated      other comprehensive loss |   | $      | (1,304,072 | )      |   |   | (1,914,546 | )  |

|                                                                                                                                                  |   |  Cost |               |   | Fair Value |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|--------------------|--------|-----------------|--------|
|                                                                                                                                                  |   |
| Due      one year or less                                                                                                                             |   | $          | -                  |   |            |   | - |   |
| Due      after one year through five years                                                                                                            |   |       | 500,000            |   |            |   | 481,768 |   |
| Due      after five years through ten years                                                                                                           |   |       | 215,396            |   |            |   | 215,432 |   |
| Due      after ten years                                                                                                                              |   |       | 12,453,207         |   |            |   | 12,209,939 |   |
|                                                                                                                                                  |   |
|                                                                                                                                                  |   |       | 13,168,603         |   |            |   | 12,907,139 |   |
| Mortgage-backed      securities (consisting of securities with interest rates ranging from      4.00% to 6.375% maturing February 2013 to March 2037) |   |       |   120,695,852 |   |            |   |   119,600,353 |   |
|                                                                                                                                                  |   |
|                                                                                                                                                  |   | $          | 133,864,455        |   |            |   | 132,507,492 |   |

----

|                                           |   |               2008      |        |   |              2007      |   |
|------------------------------------------------|--------|--------------------------------------------------------------------------------|-------------|--------|------------------------------------------------------------------------------------|--------|
| Mortgage      loans:                           |   |                                                                           |        |   |                                                                               |
| Residential      real estate                   |   | $                                                                              | 140,244,226 |   |                                                                               |   | 145,184,733 |   |
| Commercial      real estate                    |   |                                                                           | 111,222,848 |   |                                                                               |   | 112,534,812 |   |
| Construction                                   |   |                                                                           | 12,621,369  |   |                                                                               |   | 7,707,432 |   |
| Total      mortgage loans                      |   |                                                                           | 264,088,443 |   |                                                                               |   | 265,426,977 |   |
|                                           |   |                                                                           |        |   |                                                                               |   |   |   |   |
| Commercial      loans                          |   |                                                                           | 33,516,315  |   |                                                                               |   | 40,783,958 |   |
| Consumer      and other loans                  |   |                                                                           | 117,046,759 |   |                                                                               |   | 118,880,723 |   |
|                                           |   |                                                                           | 414,651,517 |   |                                                                               |   | 425,091,658 |   |
| Undisbursed      portion of construction loans |   |                                                                           | (8,084,395  | )      |                                                                               |   | (2,256,606 | ) |
| Net      deferred loan origination costs       |   |                                                                           | 2,626,847   |   |                                                                               |   | 2,736,366 |   |
|                                           |   |                                                                           | 409,193,969 |   |                                                                               |   | 425,571,418 |   |
|                                           |   |                                                                           |        |   |                                                                               |   |   |   |   |
| Less      allowance for loan losses            |   |                                                                           | 5,656,000   |   |                                                                               |   | 5,756,000 |   |
|                                           |   |                                                                           |        |   |                                                                               |   |   |   |   |
| Net      loans                                 |   | $                                                                              | 403,537,969 |   |                                                                               |   | 419,815,418 |   |

|                                                                                              |   | Years Ended June 30, |       |
|---------------------------------------------------------------------------------------------------|--------|----------------------|------------|
|                                                                                              |   | 2008                 |       |   | 2007 |   |   | 2006 |   |
|                                                                                              |   |
| Balance      at beginning of year                                                                 |   | $                    | 5,756,000  |   |   |   | 5,496,000 |   |   |   | 5,104,000 |   |
| Provision      charged to operating expenses                                                      |   |                 | 836,484    |   |   |   | 989,158 |   |   |   | 1,226,413 |   |
| Transferred      to off balance sheet credit risk reserve included in      other liabilities |   |                 | -          |   |   |   | - |   |   |   | (204,086 | ) |
|                                                                                              |   |
| Loans      charged off                                                                            |   |                 | (1,123,406 | ) |   |   | (854,631 | ) |   |   | (793,653 | ) |
| Recoveries      on loans previously charged off                                                   |   |                 | 186,922    |   |   |   | 125,473 |   |   |   | 163,326 |   |
|                                                                                              |   |                 |       |   |   |   |   |   |   |   |   |   |
| Net      loans charged off                                                                        |   |                 | (936,484   | ) |   |   | (729,158 | ) |   |   | (630,327 | ) |
|                                                                                              |   |                 |       |   |   |   |   |   |   |   |   |   |
| Balance      at end of year                                                                       |   | $                    | 5,656,000  |   |   |   | 5,756,000 |   |   |   | 5,496,000 |   |

----

|                                                   |   | 2008   |      |   | 2007   |   |      | 2006   |   |
|--------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
|                                                   |   |
| Impaired      loans                                    |   | $      | 5,880,447 |   |   |   | 2,498,498 |   |   |   | 7,128,111 |   |
| Impaired      loans with related allowances            |   |   | 1,371,835 |   |   |   | 884,543   |   |   |   | 5,950,923 |   |
| Allowances      on impaired loans                      |   |   | 400,430   |   |   |   | 322,402   |   |   |   | 1,290,960 |   |
|                                                   |   |
| Average      balance of impaired loans during the year |   |   | 5,243,419 |   |   |   | 2,269,862 |   |   |   | 4,584,621 |   |
| Interest      recognized on impaired loans             |   |   | 306,098   |   |   |   | 211,346   |   |   |   | 71,400 |   |

|                                     |   | 2008   |       |   | 2007   |   |
|------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                     |
| Land                                     |   | $      | 1,560,331  |   |   |   | 1,327,621 |   |
| Buildings                                |   |   | 2,798,651  |   |   |   | 2,058,695 |   |
| Assets      recorded under capital lease |   |   | 3,267,702  |   |   |   | 2,892,702 |   |
| Leasehold      and building improvements |   |   | 2,049,692  |   |   |   | 1,888,618 |   |
| Furniture,      fixtures and equipment   |   |   | 6,414,077  |   |   |   | 5,663,105 |   |
|                                     |   |   | 16,090,453 |   |   |   | 13,830,741 |   |
| Less      accumulated depreciation       |   |   | 7,406,884  |   |   |   | 6,285,311 |   |
| Net      premises and equipment          |   | $      | 8,683,569  |   |   |   | 7,545,430 |   |

|                                                                                            |   | 2008   |    |   | 2007   |   |
|-------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                                                            |   |
| Real      estate properties acquired in settlement of loans and other acquired      assets |   | $      | 678,350 |   |   |   |  - |   |
| Less      allowance for losses                                                                  |   |   | -       |   |   |   | - |   |
|                                                                                            |   |
|                                                                                            |   | $      | 678,350 |   |   |   | - |   |

----

|  Purchase      price          |   | Hartford |        |   | Spence      &Mathews |   |      | Hyler     |   |   | Totals    |   |
|------------------------------------|--------|----------|-------------|--------|--------------------------|--------|-----------|-----------|--------|--------|-----------|--------|
| Cash      paid                     |   | $        | 425,250     |   |                     |   | 3,043,000 |      |   |   | 233,000   |   |   |   | 3,701,250 |   |
| Debt      incurred                 |   |     | 911,350     |   |                     |   | 1,122,885 |      |   |   | 789,701   |   |   |   | 2,823,936 |   |
| Acquisition      costs             |   |     |  9,181 |   |                     |   | 17,630    |      |   |   | 9,543     |   |   |   | 36,354 |   |
| Total                              |   | $        | 1,345,781   |   |                     |   | 4,183,515 |      |   |   | 1,032,244 |   |   |   | 6,561,540 |   |
|                               |   |     |        |   |                     |   |      |      |   |   |      |   |   |   |   |   |
| Allocation      of purchase price: |   |     |        |   |                     |   |      |      |   |   |      |   |   |   |   |   |
| Goodwill                           |   | $        | 275,781     |   |                     |   | 1,090,265 |      |   |   | 179,064   |   |   |   | 1,545,110 |   |
| Customer      list intangible      |   |     | 970,000     |   |                     |   | 2,285,000 |      |   |   | 650,000   |   |   |   | 3,905,000 |   |
| Non-compete      intangible        |   |     | 100,000     |   |                     |   | 800,000   |      |   |   | 200,000   |   |   |   | 1,100,000 |   |
| Fixed      and other assets        |   |     | -           |   |                     |   | 8,250     |      |   |   | 3,180     |   |   |   | 11,430 |   |
| Total                              |   | $        | 1,345,781   |   |                     |   | 4,183,515 |      |   |   | 1,032,244 |   |   |   | 6,561,540 |   |
|                               |   |     |        |   |                     |   |      |      |   |   |      |   |   |   |   |   |
| Acquisition      date              |   | 08/30/07 |        |   | 11/30/07                 |   |      | 12/11/07  |   |   |      |   |   |
| Location      in Maine             |   | Auburn   |        |   | Berwick                  |   |      | Thomaston |   |   |      |   |   |

|  Purchase      price          |   | Palmer   |      |   | Sturtevantand Ham |   |        | SouthernMaine |   |   | Russell           |   |   | Totals |    |
|------------------------------------|--------|----------|-----------|--------|-------------------|--------|-------------|---------------|--------|--------|-------------------|--------|--------|--------|---------|
| Cash      paid                     |   | $        | 800,000   |   |              |   | 475,000     |          |   |   | 900,000           |   |   |   | 275,000 |   |   |   | 2,450,000 |   |
| Debt      incurred                 |   |     | 1,067,000 |   |              |   | 475,000     |          |   |   | 450,000           |   |   |   | 325,000 |   |   |   | 2,317,000 |   |
| Acquisition      costs             |   |     | 8,360     |   |              |   |  3,877 |          |   |   |   4,264 |   |   |   | 4,501   |   |   |   | 21,002 |   |
| Total                              |   | $        | 1,875,360 |   |              |   | 953,877     |          |   |   | 1,354,264         |   |   |   | 604,501 |   |   |   | 4,788,002 |   |
|                               |   |     |      |   |              |   |        |          |   |   |              |   |   |   |    |   |   |   |   |   |
| Allocation      of purchase price: |   |     |      |   |              |   |        |          |   |   |              |   |   |   |    |   |   |   |   |   |
| Goodwill                           |   | $        | 1,174,274 |   |              |   | 324,367     |          |   |   | 754,764           |   |   |   | 219,501 |   |   |   | 2,472,906 |   |
| Customer      list intangible      |   |     | 600,000   |   |              |   | 550,000     |          |   |   | 520,000           |   |   |   | 300,000 |   |   |   | 1,970,000 |   |
| Non-compete      intangible        |   |     | 300,000   |   |              |   | 75,000      |          |   |   | 75,000            |   |   |   | 85,000  |   |   |   | 535,000 |   |
| Fixed      and other assets        |   |     | 5,086     |   |              |   | 4,510       |          |   |   | 4,500             |   |   |   | -       |   |   |   | 14,096 |   |
| Deferred      income taxes         |   |     | (204,000  | )      |              |   |  -     |          |   |   | -                 |   |   |   | -       |   |   |   | (204,000 | ) |
| Total                              |   | $        | 1,875,360 |   |              |   | 953,877     |          |   |   | 1,354,264         |   |   |   | 604,501 |   |   |   | 4,788,002 |   |
|                               |   |     |      |   |              |   |        |          |   |   |              |   |   |   |    |   |   |   |   |   |
| Acquisition      date              |   | 11/28/06 |      |   | 12/01/06          |   |        | 03/30/07      |   |   | 06/28/07          |   |   |   |    |   |
| Location      in Maine             |   | Turner   |      |   | Livermore         |   |        | Scarborough   |   |   | Madison           |   |   |   |    |   |

----

|                                                               |                    | WeightedAverage      Rateat      June |   |   | 2008   |   |       | 2007   |        |
|--------------------------------------------------------------------|-------------------------|---------------------------------------|--------|--------|--------|--------|------------|-------------|-------------|
|                                                               |                    |  30,      2008                   |   |   | Amount |   |       | Percent     |        |   | Amount |   |   | Percent |   |
|                                                               |                    |                                  |   |   |   |   |       |        |        |   |   |   |   |   |   |
| Demand                                                             |                    |                                  | 0.00   | %      |   | $      | 35,142,661 |        |        |   | 9.7 | % |   |   | 36,332,604 |   |   |   | 10.0 | % |
| NOW                                                                |                    |                                  | 1.46   | %      |   |   | 47,977,659 |        |        |   | 13.2 | % |   |   | 53,405,241 |   |   |   | 14.7 | % |
| Money      market                                                  |                    |                                  | 2.50   | %      |   |   | 22,160,816 |        |        |   | 6.1 | % |   |   | 8,053,552 |   |   |   | 2.2 | % |
| Regular      savings                                               |                    |                                  | 0.52   | %      |   |   | 19,905,507 |        |        |   | 5.5 | % |   |   | 21,145,567 |   |   |   | 5.8 | % |
| Certificates      of deposit and brokered      time deposits: |                    |                                  |   |   |   |   |       |        |        |   |   |   |   |   |   |   |   |   |   |   |
|                                                               | Less      than 1.00%    |                                  |   | 0.50   | %      |   |       | 7,674       |        |   |   | 0.0 | % |   |   | 151,674 |   |   |   | 0.0 | % |
|                                                               |  1.00      - 3.75% |                                  |   | 3.09   | %      |   |       | 109,394,988 |        |   |   | 30.1 | % |   |   | 9,973,634 |   |   |   | 2.7 | % |
|                                                               |  3.76      - 5.75% |                                  |   | 4.80   | %      |   |       | 128,739,995 |        |   |   | 35.4 | % |   |   | 235,151,508 |   |   |   | 64.5 | % |
|                                                               |  5.76      - 7.75% |                                  |   | 6.90   | %      |   |       | 44,471      |        |   |   | 0.0 | % |   |   | 339,997 |   |   |   | 0.1 | % |
|                                                               |                    |                                  |   |   |   |   |       |        |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                               |                    |                                  |   |   | 3.00   | %      |       | $           | 363,373,771 |   |   |   | 100.0 | % |   |   | 364,553,777 |   |   |   | 100.0 | % |

|                            | 2009                                                                     |   | 2010                                                                                                    |   | 2011                                                                                              |   | 2012                                                                                              |   | 2013                                                                                                          |   | Thereafter                                                                                        |
|---------------------------------|--------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------|
| Less      than  1.00% | $           7,674 |   |                       - |   |                 - |   |                 - |   |                   - |   |                 - |
| 1.00-3.75%                      | 96,306,016                                                               |   | 11,802,228                                                                                              |   | 305,343                                                                                           |   | 127,964                                                                                           |   | 808,403                                                                                                       |   | 45,034                                                                                            |
| 3.76-5.75%                      | 105,694,785                                                              |   | 14,402,647                                                                                              |   | 3,487,255                                                                                         |   | 1,986,400                                                                                         |   | 2,946,335                                                                                                     |   | 222,573                                                                                           |
| 5.76-7.75%                      | 9,807                                                                    |   | -                                                                                                       |   | 34,664                                                                                            |   | -                                                                                                 |   | -                                                                                                             |   | -                                                                                                 |
|                            |                                                                     |   |                                                                                                    |   |                                                                                              |   |                                                                                              |   |                                                                                                          |   |                                                                                              |
| Total                           | $202,018,282                                                             |   | 26,204,875                                                                                              |   |  3,827,262                                                                                   |   |  2,114,364                                                                                   |   |    3,754,738                                                                                   |   |     267,607                                                                   |

|                                                    |   | 2008   |       |   | 2007   |   |       | 2006   |   |
|---------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
|                                                    |   |
| NOW                                                     |   | $      | 1,019,644  |   |   |   | 1,234,207  |   |   |   | 1,065,675 |   |
| Money      market                                       |   |   | 419,733    |   |   |   | 221,118    |   |   |   | 246,283 |   |
| Regular      savings                                    |   |   | 160,518    |   |   |   | 194,258    |   |   |   | 227,830 |   |
| Certificates      of deposit and brokered time deposits |   |   | 11,489,981 |   |   |   | 11,840,590 |   |   |   | 9,612,518 |   |
|                                                    |   |
|                                                    |   | $      | 13,089,876 |   |   |   | 13,490,173 |   |   |   | 11,152,306 |   |

----

|                                June      30,      2008                               |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| PrincipalAmounts                                                                                                                                                                                                                                                                                                                                                                                      | Interest Rates  | Maturity  Dates   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |
| $55,575,000                                                                                                                                                                                                                                                                                                                                                                                           | 2.50%      - 5.21% | 2009 |
|     2,000,000                                                                                                                                                                                                                                                                                                                                                                     | 4.31% | 2010 |
|     3,000,000                                                                                                                                                                                                                                                                                                                                                                     | 4.99% | 2011 |
|   15,000,000                                                                                                                                                                                                                                                                                                                                                                                | 2.55%      - 3.99% | 2013 |
|   10,000,000                                                                                                                                                                                                                                                                                                                                                                                | 4.26% | 2017 |
|     5,000,000                                                                                                                                                                                                                                                                                                                                                                     | 4.29% | 2018 |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |
| $90,575,000                                                                                                                                                                                                                                                                                                                                                                                           |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                June      30,      2007                               |
| PrincipalAmounts                                                                                                                                                                                                                                                                                                                                                                                      | Interest Rates  | Maturity  Dates   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |
| $50,016,698                                                                                                                                                                                                                                                                                                                                                                                           | 2.68%      - 5.69% | 2008 |
|  30,000,000                                                                                                                                                                                                                                                                                                                                                                                      | 4.86%      - 5.21% | 2009 |
|   3,000,000                                                                                                                                                                                                                                                                                                                                                                                 | 4.99% | 2011 |
|  10,000,000                                                                                                                                                                                                                                                                                                                                                                                      | 4.26% | 2017 |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |
| $93,016,698                                                                                                                                                                                                                                                                                                                                                                                           |   |   |

| Amount      | Interest Rate | Cap/Floor           | Notional Amount | Strike Rate | Maturity               |
|-------------|---------------|---------------------|-----------------|-------------|------------------------|
| $20,000,000 | 4.68%         | Purchased      Caps | $40,000,000     | 5.50%       | August      28, 2012   |
| 10,000,000  | 3.98%         | Sold      Floors    | $20,000,000     | 4.86%       | August      28, 2012   |
| 10,000,000  | 4.18%         | Purchased      Caps | $10,000,000     | 4.88%       | December      13, 2012 |
| $40,000,000 |          |                |            |        |                   |

----

|                                June      30,      2008                               |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  PrincipalAmounts                                                                                                                                                                                                                                                                                                                                                                                | Interest Rates  | Maturity  Dates   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |
| $   763,067                                                                                                                                                                                                                                                                                                                                                                            | 6.50% | 2009 |
|     634,157                                                                                                                                                                                                                                                                                                                                                                       | 6.50% | 2010 |
|     496,029                                                                                                                                                                                                                                                                                                                                                                       | 6.50% | 2011 |
|     528,270                                                                                                                                                                                                                                                                                                                                                                       | 6.50% | 2012 |
|     562,608                                                                                                                                                                                                                                                                                                                                                                       | 6.50% | 2013 |
|     599,178                                                                                                                                                                                                                                                                                                                                                                       | 6.50% | 2014 |
|     443,576                                                                                                                                                                                                                                                                                                                                                                       | 6.50% | 2015 |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|    $      4,026,885                                                                                                                                                                                                                                                                                                                                                |   |   |

|                                June      30,      2007                               |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| PrincipalAmounts                                                                                                                                                                                                                                                                                                                                                                                      | Interest Rates  | Maturity  Dates   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |
| $   534,522                                                                                                                                                                                                                                                                                                                                                                            | 6.50% | 2008 |
|     569,471                                                                                                                                                                                                                                                                                                                                                                       | 6.50% | 2009 |
|     428,194                                                                                                                                                                                                                                                                                                                                                                       | 6.50% | 2010 |
|     244,721                                                                                                                                                                                                                                                                                                                                                                       | 6.50% | 2011 |
|     161,056                                                                                                                                                                                                                                                                                                                                                                       | 6.50% | 2012 |
|     171,525                                                                                                                                                                                                                                                                                                                                                                       | 6.50% | 2013 |
|     182,674                                                                                                                                                                                                                                                                                                                                                                       | 6.50% | 2014 |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|   $ 2,292,163                                                                                                                                                                                                                                                                                                                                                           |   |   |

| 2009                     | $        303,142   |
|--------------------------|----------------------------------------|
| 2010                     | 303,142                      |
| 2011                     | 303,142                      |
| 2012                     | 303,142                      |
| 2013                     | 303,142                      |
| 2014      and thereafter |        2,684,381        |
|                     | Total      minimum lease payments      | 4,200,091  |
|                     | Less      imputed interest             | 1,309,069  |
|                     |                                   |   |
|                     | Capital      lease obligation          | $      2,891,022  |

----

|                                                        |   |    Actual                                  |   |   For      CapitalAdequacy Purposes |   | To      Be "WellCapitalized"      UnderPrompt      CorrectiveAction Provisions |
|-------------------------------------------------------------|--------|-----------------------------------------------------------|--------|-----------------------------------------------|--------|--------------------------------------------------------------------------------|
|                                                        |   | Amount                                                    |   | Ratio                                         |   | Amount                                                                         |   | Ratio |   | Amount |   | Ratio |
|                                                        |   |   (Dollars      in Thousands)    |
| As      of June 30, 2008:                                   |   |                                                      |   |                                          |   |                                                                           |   |   |   |   |   |   |
| Northeast      Bancorp:                                     |   |                                                      |   |                                          |   |                                                                           |   |   |   |   |   |   |
| Total      capital to risk  weighted      assets  |   | $                                                         | 50,245 |                                          |   | 11.91                                                                          | % |  >33,744 |   |  >8.0% |   |  >42,180 |   |  >10.0% |
| Tier      1 capital to risk  weighted      assets |   | $                                                         | 41,919 |                                          |   | 9.94                                                                           | % |  >16,872 |   |  >4.0% |   |  >25,308 |   |  > 6.0% |
| Tier      1 capital to total  average      assets |   | $                                                         | 41,919 |                                          |   | 7.31                                                                           | % |  >22,943 |   |  >4.0% |   |  >28,679 |   |  > 5.0% |
|                                                        |   |                                                      |   |                                          |   |                                                                           |   |   |   |   |   |   |   |   |
| As      of June 30, 2007:                                   |   |                                                      |   |                                          |   |                                                                           |   |   |   |   |   |   |   |   |
| Northeast      Bancorp:                                     |   |                                                      |   |                                          |   |                                                                           |   |   |   |   |   |   |   |   |
| Total      capital to risk  weighted      assets  |   | $                                                         | 57,302 |                                          |   | 13.97                                                                          | % |  >32,804 |   |  >8.0% |   |  >41,005 |   |  >10.0% |
| Tier      1 capital to risk  weighted      assets |   | $                                                         | 49,295 |                                          |   | 12.02                                                                          | % |  >16,402 |   |  >4.0% |   |  >24,603 |   |  > 6.0% |
| Tier      1 capital to total  average      assets |   | $                                                         | 49,295 |                                          |   | 9.07                                                                           | % |  >21,845 |   |  >4.0% |   |  >27,306 |   |  > 5.0% |

----

|                                                        |   |    Actual                      |   |   For      CapitalAdequacy Purposes |   | To      Be "WellCapitalized"      UnderPrompt      CorrectiveAction Provisions |
|-------------------------------------------------------------|--------|-----------------------------------------------|--------|-----------------------------------------------|--------|--------------------------------------------------------------------------------|
|                                                        |   | Amount                                        |   | Ratio                                         |   | Amount                                                                         |   | Ratio |   | Amount |   | Ratio |
|                                                        |   | (Dollars      in Thousands)    |
| As      of June 30, 2008:                                   |   |                                          |   |                                          |   |                                                                           |   |   |   |   |   |   |
| Northeast      Bank:                                        |   |                                          |   |                                          |   |                                                                           |   |   |   |   |   |   |
| Total      capital to risk  weighted      assets  |   | $                                             | 45,555 |                                          |   | 10.85                                                                          | % |  >33,581 |   |  >8.0% |   |  >41,976 |   |  >10.0% |
| Tier      1 capital to risk  weighted      assets |   | $                                             | 40,302 |                                          |   | 9.60                                                                           | % |  >16,791 |   |  >4.0% |   |  >25,186 |   |  > 6.0% |
| Tier      1 capital to total  average      assets |   | $                                             | 40,302 |                                          |   | 7.06                                                                           | % |  >22,847 |   |  >4.0% |   |  >28,559 |   |  > 5.0% |
|                                                        |   |                                          |   |                                          |   |                                                                           |   |   |   |   |   |   |   |   |
| As      of June 30, 2007:                                   |   |                                          |   |                                          |   |                                                                           |   |   |   |   |   |   |   |   |
| Northeast      Bank:                                        |   |                                          |   |                                          |   |                                                                           |   |   |   |   |   |   |   |   |
| Total      capital to risk  weighted      assets  |   | $                                             | 51,892 |                                          |   | 12.71                                                                          | % |  >32,668 |   |  >8.0% |   |  >40,835 |   |  >10.0% |
| Tier      1 capital to risk  weighted      assets |   | $                                             | 46,780 |                                          |   | 11.46                                                                          | % |  >16,334 |   |  >4.0% |   |  >24,501 |   |  > 6.0% |
| Tier      1 capital to total  average      assets |   | $                                             | 46,780 |                                          |   | 8.60                                                                           | % |  >21,748 |   |  >4.0% |   |  >27,185 |   |  > 5.0% |

|                                                                         |   | 2008   |      |   | 2007   |   |      | 2006   |   |
|------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
|                                                                         |   |
| Average      shares outstanding, used in computing Basic EPS                 |   |   | 2,352,484 |   |   |   | 2,451,610 |   |   |   | 2,493,560 |   |
|                                                                         |   |   |      |   |   |   |      |   |   |   |   |   |
| Effect      of Dilutive Securities:                                          |   |   |      |   |   |   |      |   |   |   |   |   |
|    Stock      and options outstanding                         |   |   | 12,357    |   |   |   | 18,905    |   |   |   | 23,456 |   |
|    Options      exercised or canceled                         |   |   | 1,499     |   |   |   | 47        |   |   |   | 9,079 |   |
| Average      equivalent shares outstanding, used in computing Diluted    EPS |   |   | 2,366,340 |   |   |   | 2,470,562 |   |   |   | 2,526,095 |   |

----

|                                             |   | 2008   |      |   | 2007   |   |      | 2006   |   |
|--------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
|                                             |   |   |      |   |   |   |      |   |   |
| Professional      fees                           |   | $      | 674,100   |   |   |   | 639,821   |   |   |   | 620,914 |   |
| Advertising      expense                         |   |   | 504,234   |   |   |   | 440,222   |   |   |   | 491,920 |   |
| Write-down      of non-marketable securities     |   |   | 47,020    |   |   |   | 248,482   |   |   |   | 42,257 |   |
| Computer      services and processing costs      |   |   | 615,402   |   |   |   | 616,173   |   |   |   | 580,995 |   |
| Loan      expense                                |   |   | 308,317   |   |   |   | 402,936   |   |   |   | 342,586 |   |
| Write-down      of available-for-sale securities |   |   | 147,247   |   |   |   | 50,442    |   |   |   | 38,394 |   |
| Other                                            |   |   | 2,547,955 |   |   |   | 2,086,832 |   |   |   | 2,099,909 |   |
|                                             |   |   |      |   |   |   |      |   |   |   |   |   |
|                                             |   | $      | 4,844,275 |   |   |   | 4,484,908 |   |   |   | 4,216,975 |   |

|                           |   | 2008   |    |   | 2007   |   |     | 2006   |   |
|--------------------------------|--------|--------|---------|--------|--------|--------|----------|--------|--------|
| Federal:                       |   |   |    |   |   |   |     |   |   |
| Current                        |   | $      | 242,115 |   |   |   | 845,509  |   |   |   | 2,089,538 |   |
| Deferred                       |   |   | 218,579 |   |   |   | (329,268 | )      |   |   | (323,220 | ) |
|                           |   |   |    |   |   |   |     |   |   |   |   |   |
|                           |   |   | 460,694 |   |   |   | 516,241  |   |   |   | 1,766,318 |   |
|                           |   |   |    |   |   |   |     |   |   |   |   |   |
| State      and local - current |   |   | 66,972  |   |   |   | 62,922   |   |   |   | 85,049 |   |
|                           |   |   |    |   |   |   |     |   |   |   |   |   |
|                           |   | $      | 527,666 |   |   |   | 579,163  |   |   |   | 1,851,367 |   |

|                                                                 |   | 2008         |     |   | 2007                  |   |   | 2006         |   |
|----------------------------------------------------------------------|--------|--------------|----------|--------|-----------------------|--------|--------|--------------|--------|
|                                                                 |   |  Amount |     |   | %      ofPretaxIncome |   |   |  Amount |   |   | %      ofPretaxIncome |   |   |  Amount |   |   | %      ofPretaxIncome |   |
| Expected      income tax  expense      at federal tax rate |   | $            | 836,044  |   |                  |   | 34.0   | %            |   |   |  838,386 |   |   |   | 34.0 | % |   |   |  1,990,892 |   |   |   | 34.0 | % |
| State      tax, net of federal tax  benefit                |   |         | 44,100   |   |                  |   | 1.8    |         |   |   | 41,529 |   |   |   | 1.7 |   |   |   | 56,132 |   |   |   | 1.0 |   |
| Dividend      received deduction                                |   |         | (34,991  | )      |                  |   | (1.4   | )            |   |   | (33,547 | ) |   |   | (1.4 | ) |   |   | (30,634 | ) |   |   | (0.5 | ) |
| Non-taxable      interest income                                     |   |         | (171,749 | )      |                  |   | (7.0   | )            |   |   | (143,938 | ) |   |   | (5.8 | ) |   |   | - |   |   |   | - |   |
| Non-taxable      BOLI income                                         |   |         | (158,777 | )      |                  |   | (6.5   | )            |   |   | (118,748 | ) |   |   | (4.8 | ) |   |   | (112,829 | ) |   |   | (1.9 | ) |
| Other                                                                |   |         | 13,039   |   |                  |   | 0.6    |         |   |   | (4,519 | ) |   |   | (0.2 | ) |   |   | (52,194 | ) |   |   | (0.9 | ) |
|                                                                 |   |         |     |   |                  |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                 |   | $            | 527,666  |   |                  |   | 21.5   | %            |   |   | 579,163 |   |   |   | 23.5 | % |   |   | 1,851,367 |   |   |   | 31.7 | % |

|                                                                                                          |   | 2008   |      |   | 2007   |   |
|---------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Deferred      tax assets:                                                                                     |   |   |      |   |   |   |
| Loans,      principally due to allowance for loan losses                                                      |   | $      | 1,929,000 |   |   |   | 2,018,000 |   |
| Interest      on nonperforming loans                                                                          |   |   | 138,000   |   |   |   | 72,000 |   |
| Difference      in tax and financial statement basis of investments                                           |   |   | 829,000   |   |   |   | 1,125,000 |   |
| Deferred      compensation                                                                                    |   |   | 45,000    |   |   |   | 263,000 |   |
| Other                                                                                                         |   |   | 86,000    |   |   |   | 110,000 |   |
|                                                                                                          |   |   |      |   |   |   |   |   |
| Total      deferred tax assets                                                                                |   |   | 3,027,000 |   |   |   | 3,588,000 |   |
|                                                                                                          |   |   |      |   |   |   |   |   |
| Deferred      tax liabilities:                                                                                |   |   |      |   |   |   |   |   |
| Difference      in tax and financial statement amortization of goodwill and      other intangible assets |   |   | (348,000  | )      |   |   | (324,000 | ) |
| Mortgage      servicing rights                                                                                |   |   | (36,000   | )      |   |   | (69,000 | ) |
| Premises      and equipment                                                                                   |   |   | (182,000  | )      |   |   | (193,000 | ) |
| Prepaid      expenses                                                                                         |   |   | (151,000  | )      |   |   | (159,000 | ) |
|                                                                                                          |   |   |      |   |   |   |   |   |
| Total      deferred tax liabilities                                                                           |   |   | (717,000  | )      |   |   | (745,000 | ) |
|                                                                                                          |   |   |      |   |   |   |   |   |
| Net      deferred tax asset, included in other assets                                                         |   | $      | 2,310,000 |   |   |   | 2,843,000 |   |

----

|                                                            |   | 2008               |    |   | 2007                                |   |   | 2006               |   |
|-----------------------------------------------------------------|--------|--------------------|---------|--------|-------------------------------------|--------|--------|--------------------|--------|
|                                                            |   |   Shares |    |   | Weighted-AverageExercise Price |   |   |   Shares |   |   | Weighted-AverageExercise Price |   |   |   Shares |   |   | Weighted-AverageExercise Price |   |
| Outstanding      at beginning of year                           |   |               | 52,000  |   |                                | $      | 12.12  |               |   |   | 52,500 |   |   | $ | 12.13 |   |   |   | 71,500 |   |   | $ | 12.31 |   |
| Granted                                                         |   |               | -       |   |                                |   |   |               |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Exercised                                                       |   |               | (4,000  | )      |                                |   | 11.28  |               |   |   | (500 | ) |   |   | 13.10 |   |   |   | (17,500 | ) |   |   | 12.23 |   |
| Expired                                                         |   |               | (12,000 | )      |                                |   | 18.50  |               |   |   | - |   |   |   | - |   |   |   | (1,500 | ) |   |   | 14.90 |   |
| Outstanding      and exercisable  at      end of year |   |               | 36,000  |   |                                | $      | 10.09  |               |   |   | 52,000 |   |   | $ | 12.12 |   |   |   | 52,500 |   |   | $ | 12.13 |   |

|                                    |                                                    | Options      Outstanding and Exercisable                           |
|-----------------------------------------|---------------------------------------------------------|--------------------------------------------------------------------|
|  Range      ofExercise      Prices | NumberOutstanding      at June 30,      2008  | Weighted-AverageRemaining Contractual Life      (Years)  |  Weighted-Average  Exercise      Price   |
| $8.00      to $8.88                     | 23,500                                                  | 1.6                                                                | $   8.48 |
| $13.10                                  | 12,500                                                  | 3.1                                                                |   13.10 |
|                                    |                                                    |                                                               |   |
| $8.00      to $13.10                    | 36,000                                                  | 2.1                                                                | $ 10.09 |

----

|                                                                                                  |   | 2008   |       |   | 2007   |   |
|-------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                                                                                  |   |   |       |   |   |   |
| Commitments      to originate loans:                                                                  |   |   |       |   |   |   |
| Residential      real estate mortgages                                                                |   | $      | 4,050,000  |   |   |   | 5,936,000 |   |
| Residential      real estate mortgages held for sale                                                  |   |   | 943,000    |   |   |   | 2,557,000 |   |
| Construction      loans                                                                               |   |   | 2,702,000  |   |   |   | - |   |
| Commercial      real estate mortgages, including multi-family  residential      real estate |   |   | 11,729,000 |   |   |   | 395,000 |   |
| Commercial      business loans                                                                        |   |   | 510,000    |   |   |   | 3,672,000 |   |
|                                                                                                  |   |   |       |   |   |   |   |   |
|                                                                                                  |   | $      | 19,934,000 |   |   |   | 12,560,000 |   |
|                                                                                                  |   |   |       |   |   |   |   |   |
| Unused      lines of credit                                                                           |   | $      | 36,831,000 |   |   |   | 42,745,000 |   |
| Standby      letters of credit                                                                        |   |   | 1,113,000  |   |   |   | 696,000 |   |
| Unadvanced      portions of construction loans                                                        |   |   | 8,084,000  |   |   |   | 2,257,000 |   |

| 2009                     | $    458,557 |
|--------------------------|----------------------------------|
| 2010                     | 430,225                          |
| 2011                     | 361,600                          |
| 2012                     | 361,076                          |
| 2013                     | 192,033                          |
| 2014      and thereafter | 306,257                          |
|                     |                             |
|                     | $      2,109,748                 |

----

| Balance      Sheets                                             |   | June 30, |       |
|-----------------------------------------------------------------|--------|----------|------------|
| Assets                                                          |   | 2008     |       |   | 2007 |   |
|                                                            |   |     |       |   |   |   |
| Cash                                                            |   | $        | 417,838    |   |   |   | 1,339,286 |   |
| Available-for-sale      securities                              |   |     | 953,617    |   |   |   | 565,516 |   |
| Investment      in banking subsidiary                           |   |     | 51,582,074 |   |   |   | 51,464,689 |   |
| Investment      in common securities of affiliated trusts       |   |     | 496,000    |   |   |   | 496,000 |   |
| Goodwill,      net                                              |   |     | 407,897    |   |   |   | 407,897 |   |
| Other      assets                                               |   |     | 2,987,843  |   |   |   | 3,213,580 |   |
|                                                            |   |     |       |   |   |   |   |   |
| Total      assets                                               |   | $        | 56,845,269 |   |   |   | 57,486,968 |   |
|                                                            |   |     |       |   |   |   |   |   |
| Liabilities and      Stockholders' Equity                       |   |     |       |   |   |   |   |   |
|                                                            |   |     |       |   |   |   |   |   |
| Junior      Subordinated Debentures issued to affiliated trusts |   | $        | 16,496,000 |   |   |   | 16,496,000 |   |
| Other      liabilities                                          |   |     | 75,957     |   |   |   | 141,090 |   |
|                                                            |   |     |       |   |   |   |   |   |
|                                                            |   |     | 16,571,957 |   |   |   | 16,637,090 |   |
|                                                            |   |     |       |   |   |   |   |   |
| Stockholders'      equity                                       |   |     | 40,273,312 |   |   |   | 40,849,878 |   |
|                                                            |   |     |       |   |   |   |   |   |
| Total      liabilities and stockholders' equity                 |   | $        | 56,845,269 |   |   |   | 57,486,968 |   |

| Statements of      Income                                                                                         |   |
|-------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                              |   | Years Ended June 30, |   |
|                                                                                                              |   | 2008 |   |   | 2007 |   |   | 2006 |   |
| Income:                                                                                                           |   |   |   |   |   |   |   |   |   |
| Dividends      from banking subsidiary                                                                            |   | $ | 3,300,000 |   |   |   | 2,500,000 |   |   |   | 1,250,000 |   |
| Other      income                                                                                                 |   |   | 265,516 |   |   |   | 233,814 |   |   |   | 147,233 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      income                                                                                                 |   |   | 3,565,516 |   |   |   | 2,733,814 |   |   |   | 1,397,233 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses:                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      on Junior Subordinated Debentures paid  to      affiliated trusts                         |   |   | 1,064,964 |   |   |   | 1,080,538 |   |   |   | 1,063,681 |   |
| General      and administrative expenses                                                                          |   |   | 338,694 |   |   |   | 372,513 |   |   |   | 151,421 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      expenses                                                                                               |   |   | 1,403,658 |   |   |   | 1,453,051 |   |   |   | 1,215,102 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      (loss) before income tax benefit and equity  in      undistributed net income of subsidiary |   |   | 2,161,858 |   |   |   | 1,280,763 |   |   |   | 182,131 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      tax benefit                                                                                           |   |   | 402,919 |   |   |   | 427,997 |   |   |   | 367,542 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      before equity in undistributed net (loss)  income      of subsidiary                        |   |   | 2,564,777 |   |   |   | 1,708,760 |   |   |   | 549,673 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity      in undistributed net (loss) income of subsidiary                                                      |   |   | (633,488 | ) |   |   | 177,917 |   |   |   | 3,454,526 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                                                                                   |   | $ | 1,931,289 |   |   |   | 1,886,677 |   |   |   | 4,004,199 |   |

----

|                                                                                                   | Years Ended June 30, |       |
|--------------------------------------------------------------------------------------------------------|----------------------|------------|
| Statements of Cash      Flows                                                                          | 2008                 |       |   | 2007 |   |   | 2006 |   |
| Cash      flows from operating activities:                                                             |                 |       |   |   |   |   |   |   |
| Net      income                                                                                        | $                    | 1,931,289  |   |   |   | 1,886,677 |   |   |   | 4,004,199 |   |
| Adjustments      to reconcile net income to net cash  provided      by operating activities: |                 |       |   |   |   |   |   |   |   |   |   |
| Amortization                                                                                           |                 | 24,000     |   |   |   | 24,000 |   |   |   | 24,000 |   |
| Stock      grant                                                                                       |                 | 2,661      |   |   |   | - |   |   |   | - |   |
| Undistributed      loss (earnings) of subsidiary                                                       |                 | 633,488    |   |   |   | (177,917 | ) |   |   | (3,454,526 | ) |
| Write      down on available-for-sale securities                                                       |                 | 147,247    |   |   |   | 50,442 |   |   |   | 33,404 |   |
| Net      gain on available-for-sale securities                                                         |                 | (78,789    | ) |   |   | (43,513 | ) |   |   | (17,693 | ) |
| Write      down of non-marketable investments                                                          |                 | 47,020     |   |   |   | 248,482 |   |   |   | 42,257 |   |
| Decrease      (increase) in other assets                                                               |                 | 227,045    |   |   |   | (366,431 | ) |   |   | (272,411 | ) |
| (Decrease)      increase in other liabilities                                                          |                 | (65,133    | ) |   |   | 56,876 |   |   |   | 9,934 |   |
|                                                                                                   |                 |       |   |   |   |   |   |   |   |   |   |
| Net      cash provided by operating activities                                                         |                 | 2,868,828  |   |   |   | 1,678,616 |   |   |   | 369,164 |   |
|                                                                                                   |                 |       |   |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities:                                                             |                 |       |   |   |   |   |   |   |   |   |   |
| Increase      in investment of bank subsidiary                                                         |                 | -          |   |   |   | (400,000 | ) |   |   | - |   |
| Purchases      of available-for-sale securities                                                        |                 | (1,653,242 | ) |   |   | (1,964,213 | ) |   |   | (1,063,076 | ) |
| Proceeds      from sales of available-for-sale securities                                              |                 | 983,956    |   |   |   | 2,249,946 |   |   |   | 855,635 |   |
|                                                                                                   |                 |       |   |   |   |   |   |   |   |   |   |
| Net      cash used by investing activities                                                             |                 | (669,286   | ) |   |   | (114,267 | ) |   |   | (207,441 | ) |
|                                                                                                   |                 |       |   |   |   |   |   |   |   |   |   |
| Cash      flows from financing activities:                                                             |                 |       |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock                                                                          |                 | 45,125     |   |   |   | 6,550 |   |   |   | 213,972 |   |
| Common      stock issued in connection with the purchase of branch      real estate               |                 | -          |   |   |   | 103,000 |   |   |   | - |   |
| Company      stock purchased                                                                           |                 | (2,314,330 | ) |   |   | (67,944 | ) |   |   | (2,142,250 | ) |
| Dividends      paid to stockholders                                                                    |                 | (851,785   | ) |   |   | (882,453 | ) |   |   | (897,087 | ) |
|                                                                                                   |                 |       |   |   |   |   |   |   |   |   |   |
| Net      cash used by financing activities                                                             |                 | (3,120,990 | ) |   |   | (840,847 | ) |   |   | (2,825,365 | ) |
|                                                                                                   |                 |       |   |   |   |   |   |   |   |   |   |
| Net      (decrease) increase in cash                                                                   |                 | (921,448   | ) |   |   | 723,502 |   |   |   | (2,663,642 | ) |
|                                                                                                   |                 |       |   |   |   |   |   |   |   |   |   |
| Cash,      beginning of year                                                                           |                 | 1,339,286  |   |   |   | 615,784 |   |   |   | 3,279,426 |   |
|                                                                                                   |                 |       |   |   |   |   |   |   |   |   |   |
| Cash,      end of year                                                                                 | $                    | 417,838    |   |   |   | 1,339,286 |   |   |   | 615,784 |   |
|                                                                                                   |                 |       |   |   |   |   |   |   |   |   |   |
| Supplemental      schedule of cash flow information:                                                   |                 |       |   |   |   |   |   |   |   |   |   |
| Interest      paid                                                                                     | $                    | 1,065,009  |   |   |   | 1,067,097 |   |   |   | 1,039,681 |   |

|                                                                                                                                                                                                                                      | 2008   |    |   | 2007   |   |                | 2006   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|--------|--------|--------|---------------------|--------|--------|
| Unrealized      gains (losses) arising during the period, net of      tax effect of   $(364,077)      in 2008, $(361,936) in 2007 and $997,265 in 2006                                                                     | $      | 706,738 |   |   |   |   702,582      |   |   |   | (1,935,868 | )  |
|                                                                                                                                                                                                                                      |   |    |   |   |   |                |   |   |   |   |   |
| Reclassification      adjustment for losses (gains) on investments,      net of write-downs,       included in net income, net of tax effect of $49,590 in 2008, $(2,753) in      2007,       and $8,456      in 2006 |   | (96,264 | )      |   |   |     5,341 |   |   |   | (16,414 | )  |
|                                                                                                                                                                                                                                      |   |    |   |   |   |                |   |   |   |   |   |
| Other      comprehensive income (loss)                                                                                                                                                                                                    | $      | 610,474 |   |   |   | 707,923             |   |   |   | (1,952,282 | )  |

----

|                                                            |    |       |   |      |   |      | Consolidated |
|-----------------------------------------------------------------|---------|------------|--------|-----------|--------|-----------|--------------|
| June      30, 2008                                              | Banking |       |   | Insurance |   |      | Total        |
| Net      interest income (expense)                              | $       | 14,632,155 |   |      |   | (285,486  | )            |   |   | 14,346,669 |
| Provision      for loan losses                                  |    | 836,484    |   |      |   | -         |         |   |   | 836,484 |
| Net      interest income (loss) after provision for loan losses |    | 13,795,671 |   |      |   | (285,486  | )            |   |   | 13,510,185 |
|                                                            |    |       |   |      |   |      |         |   |   |   |
| Noninterest      income                                         |    | 5,419,585  |   |      |   | 5,383,639 |         |   |   | 10,803,224 |
| Noninterest      expense                                        |    | 17,018,586 |   |      |   | 4,225,211 |         |   |   | 21,243,797 |
| Amortization      of intangibles                                |    | -          |   |      |   | 610,657   |         |   |   | 610,657 |
| Income      before income taxes                                 |    | 2,196,670  |   |      |   | 262,285   |         |   |   | 2,458,955 |
| Income      tax expense                                         |    | 440,545    |   |      |   | 87,121    |         |   |   | 527,666 |
| Net      income                                                 | $       | 1,756,125  |   |      |   | 175,164   |         |   |   | 1,931,289 |
|                                                            |    |       |   |      |   |      |         |   |   |   |
|                                                            |    |       |   |      |   |      |         |   |   |   |
|                                                            |    |       |   |      |   |      |         |   | Consolidated |
| June      30, 2007                                              | Banking |       |   | Insurance |   |      | Total        |
| Net      interest income (expense)                              | $       | 15,656,172 |   |      |   | (70,815   | )            |   |   | 15,585,357 |
| Provision      for loan losses                                  |    | 989,158    |   |      |   | -         |         |   |   | 989,158 |
| Net      interest income loss after provision for loan losses   |    | 14,667,014 |   |      |   | (70,815   | )            |   |   | 14,596,199 |
|                                                            |    |       |   |      |   |      |         |   |   |   |
| Noninterest      income                                         |    | 5,577,853  |   |      |   | 2,366,974 |         |   |   | 7,944,827 |
| Noninterest      expense                                        |    | 17,062,743 |   |      |   | 2,697,859 |         |   |   | 19,760,602 |
| Amortization      of intangibles                                |    | -          |   |      |   | 314,584   |         |   |   | 314,584 |
| Income      (loss) before income taxes                          |    | 3,182,124  |   |      |   | (716,284  | )            |   |   | 2,465,840 |
| Income      tax expense (benefit)                               |    | 836,593    |   |      |   | (257,430  | )            |   |   | 579,163 |
| Net      income (loss)                                          | $       | 2,345,531  |   |      |   | (458,854  | )            |   |   | 1,886,677 |
|                                                            |    |       |   |      |   |      |         |   |   |   |
|                                                            |    |       |   |      |   |      |         |   |   |   |
|                                                            |    |       |   |      |   |      |         |   | Consolidated |
| June      30, 2006                                              | Banking |       |   | Insurance |   |      | Total        |
| Net      interest income (expense)                              | $       | 18,699,294 |   |      |   | (3,692    | )            |   |   | 18,695,602 |
| Provision      for loan losses                                  |    | 1,226,413  |   |      |   | -         |         |   |   | 1,226,413 |
| Net      interest income (loss) after provision for loan losses |    | 17,472,881 |   |      |   | (3,692    | )            |   |   | 17,469,189 |
|                                                            |    |       |   |      |   |      |         |   |   |   |
| Noninterest      income                                         |    | 4,638,214  |   |      |   | 1,956,667 |         |   |   | 6,594,881 |
| Noninterest      expense                                        |    | 16,072,230 |   |      |   | 1,895,246 |         |   |   | 17,967,476 |
| Amortization      of intangibles                                |    | -          |   |      |   | 241,028   |         |   |   | 241,028 |
| Income      (loss) before income taxes                          |    | 6,038,865  |   |      |   | (183,299  | )            |   |   | 5,855,566 |
| Income      tax expense (benefit)                               |    | 1,913,853  |   |      |   | (62,486   | )            |   |   | 1,851,367 |
| Net      income (loss)                                          | $       | 4,125,012  |   |      |   | (120,813  | )            |   |   | 4,004,199 |

----

| Affiliated  Trusts   |   | Trust      Preferred Securities |       |   | CommonSecurities |   |    | Junior      Subordinated Debentures |   |   | Interest Rate |   | Maturity   Date    |
|------------------------------------------|--------|--------------------------------------|------------|--------|------------------|--------|---------|------------------------------------------|--------|--------|--------------------|--------|--------------------------------------------------|
|                                     |   |                                 |       |   |             |   |    |                                     |   |   |               |   |                                             |
| NBN      Capital Trust II                |   | $                                    | 3,000,000  |   |             |   | 93,000  |                                     |   |   | 3,093,000          |   |                                             |   | 5.60 | %  | March 30,      2034 |
| NBN      Capital Trust III               |   |                                 | 3,000,000  |   |             |   | 93,000  |                                     |   |   | 3,093,000          |   |                                             |   | 6.50 | %  | March 30,      2034 |
| NBN      Capital Trust IV                |   |                                 | 10,000,000 |   |             |   | 310,000 |                                     |   |   | 10,310,000         |   |                                             |   | 5.88 | %  | February 23,      2035 |
|                                     |   |                                 |       |   |             |   |    |                                     |   |   |               |   |                                             |   |   |   |   |
| Total                                    |   | $                                    | 16,000,000 |   |             |   | 496,000 |                                     |   |   | 16,496,000         |   |                                             |   | 5.94 | %  |   |

----

|                                                                 |   | June 30, 2008               |    |   | June 30, 2007       |   |
|----------------------------------------------------------------------|--------|-----------------------------|---------|--------|---------------------|--------|
|                                                                 |   | Carrying Value         |    |   | EstimatedFair Value |   |   | Carrying Value |   |   | EstimatedFair Value |   |
|                                                                 |   | (Dollars      in Thousands) |    |
| Financial      assets:                                               |   |                        |    |   |                |   |   |   |   |   |   |   |
| Cash      and cash equivalents                                       |   | $                           | 12,544  |   |                |   | 12,544 |   |   |   | 10,742 |   |   |   | 10,742 |   |
| Available-for-sale      securities                                   |   |                        | 134,483 |   |                |   | 134,483 |   |   |   | 86,348 |   |   |   | 86,348 |   |
| Regulatory      stock (FHLB and FRB)                                 |   |                        | 5,361   |   |                |   | 5,361 |   |   |   | 5,297 |   |   |   | 5,297 |   |
| Loans      held-for-sale                                             |   |                        | 486     |   |                |   | 487 |   |   |   | 1,636 |   |   |   | 1,665 |   |
| Loans,      net                                                      |   |                        | 403,538 |   |                |   | 419,288 |   |   |   | 419,815 |   |   |   | 422,596 |   |
| Accrued      interest receivable                                     |   |                        | 2,291   |   |                |   | 2,291 |   |   |   | 2,587 |   |   |   | 2,587 |   |
|                                                                 |   |                        |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Financial      liabilities:                                          |   |                        |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Deposits      (with no stated maturity)                              |   |                        | 125,187 |   |                |   | 125,187 |   |   |   | 118,937 |   |   |   | 118,937 |   |
| Time      deposits                                                   |   |                        | 238,187 |   |                |   | 239,167 |   |   |   | 245,617 |   |   |   | 245,009 |   |
| Federal      Home Loan Bank advances                                 |   |                        | 90,575  |   |                |   | 91,218 |   |   |   | 93,017 |   |   |   | 92,625 |   |
| Structured      repurchase agreements                                |   |                        | 40,000  |   |                |   | 41,894 |   |   |   | - |   |   |   | - |   |
| Other      borrowings                                                |   |                        | 4,027   |   |                |   | 4,027 |   |   |   | 2,292 |   |   |   | 2,292 |   |
| Short-term      borrowings                                           |   |                        | 32,841  |   |                |   | 32,841 |   |   |   | 33,105 |   |   |   | 33,045 |   |
| Capital      lease obligation                                        |   |                        | 2,891   |   |                |   | 2,979 |   |   |   | 2,654 |   |   |   | 2,557 |   |
| Junior      subordinated debentures issued to affiliated trusts |   |                        | 16,496  |   |                |   | 15,475 |   |   |   | 16,496 |   |   |   | 16,064 |   |
| Due-to-broker                                                        |   |                        | 4,935   |   |                |   | 4,935 |   |   |   | - |   |   |   | - |   |

----

| Item 8.b. Statistical      Disclosures Required by Industry Guide 3 |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |
|--------------------------------------------------------------------------|--------------------|---------|--------|--------------------|--------|---------|--------------------|--------|---------|--------|--------|----------|---------|---------|--------|--------|---------|
|                                                                     |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |   |   |   |   |
| Table      1                                                             |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |
| Northeast      Bancorp Consolidated                                      |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |
| Distribution      of Assets, Liabilities and Stockholders' Equity        |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |
| Interest      Rates and Interest Differential                            |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |
| Years      Ended June 30, 2008, 2007 and 2006                            |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |
|                                                                     |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |   |   |   |   |
|                                                                     | June      30, 2008 |    |   | June      30, 2007 |   |    | June      30, 2006 |   |
|                                                                     |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |   |   |   |   |
|                                                                     | Average            |    |   | Interest           |   | Average |               |   | Average |   |   | Interest |    | Average |   |   | Average |   |   | Interest |   | Average |   |
|                                                                     | Daily              |    |   | Income/            |   | Yield/  |               |   | Daily   |   |   | Income/  |    | Yield/  |   |   | Daily   |   |   | Income/ |   | Yield/ |   |
|                                                                     | Balance            |    |   | Expense            |   | Rate    |               |   | Balance |   |   | Expense  |    | Rate    |   |   | Balance |   |   | Expense |   | Rate |   |
| Assets:                                                                  |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |   |   |   |   |
|                                                                     |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |   |   |   |   |
| Interest-earning      assets:                                            |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |   |   |   |   |
| Investment      securities (1)                                           | $                  | 116,558 |   |               | $      | 5,906   |               |   | 5.07    | %      |   | $        | 84,705  |    |   | $      | 3,935   |   |   | 4.65 | % |   | $ | 80,050 |   |   | $ | 3,461 |   |   | 4.32 | % |
| Loans      (2)(3)(4)                                                     |               | 414,837 |   |               |   | 29,272  |               |   | 7.06    | %      |   |     | 433,576 |    |   |   | 31,367  |   |   | 7.23 | % |   |   | 448,611 |   |   |   | 31,643 |   |   | 7.05 | % |
| Regulatory      stock                                                    |               | 5,316   |   |               |   | 307     |               |   | 5.78    | %      |   |     | 5,529   |    |   |   | 368     |   |   | 6.66 | % |   |   | 6,919 |   |   |   | 336 |   |   | 4.86 | % |
| Short-term      investments (5)                                          |               | 2,791   |   |               |   | 113     |               |   | 4.05    | %      |   |     | 4,380   |    |   |   | 210     |   |   | 4.79 | % |   |   | 3,588 |   |   |   | 134 |   |   | 3.73 | % |
| Total      interest-earning assets/interest                              |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| income/average      rates earned                                         |               | 539,502 |   |               |   | 35,598  |               |   | 6.60    | %      |   |     | 528,190 |    |   |   | 35,880  |   |   | 6.79 | % |   |   | 539,168 |   |   |   | 35,574 |   |   | 6.60 | % |
|                                                                     |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest      earning assets:                                        |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      & due from banks                                           |               | 6,498   |   |               |   |    |               |   |    |   |   |     | 6,794   |    |   |   |    |   |   |   |   |   |   | 8,845 |   |   |   |   |   |   |   |   |
| Bank      premises and equipment, net                                    |               | 7,851   |   |               |   |    |               |   |    |   |   |     | 7,345   |    |   |   |    |   |   |   |   |   |   | 7,050 |   |   |   |   |   |   |   |   |
| Other      assets                                                        |               | 29,504  |   |               |   |    |               |   |    |   |   |     | 21,705  |    |   |   |    |   |   |   |   |   |   | 19,816 |   |   |   |   |   |   |   |   |
| Allowance      for loan losses                                           |               | (5,768  | )      |               |   |    |               |   |    |   |   |     | (5,728  | )       |   |   |    |   |   |   |   |   |   | (5,451 | ) |   |   |   |   |   |   |   |
| Total      non-interest earning assets                                   |               | 38,085  |   |               |   |    |               |   |    |   |   |     | 30,116  |    |   |   |    |   |   |   |   |   |   | 30,260 |   |   |   |   |   |   |   |   |
|                                                                     |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      assets                                                        | $                  | 577,587 |   |               |   |    |               |   |    |   |   | $        | 558,306 |    |   |   |    |   |   |   |   |   | $ | 569,428 |   |   |   |   |   |   |   |   |
|                                                                     |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                     |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities      & Stockholders' Equity:                             |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                     |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      liabilities:                                       |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   NOW                                                          | $                  | 51,139  |   |               | $      | 1,020   |               |   | 1.99    | %      |   | $        | 54,667  |    |   | $      | 1,234   |   |   | 2.26 | % |   | $ | 59,969 |   |   | $ | 1,158 |   |   | 1.93 | % |
|   Money      market                                            |               | 13,784  |   |               |   | 420     |               |   | 3.05    | %      |   |     | 9,357   |    |   |   | 221     |   |   | 2.36 | % |   |   | 13,093 |   |   |   | 246 |   |   | 1.88 | % |
|   Savings                                                      |               | 20,398  |   |               |   | 160     |               |   | 0.79    | %      |   |     | 22,309  |    |   |   | 194     |   |   | 0.87 | % |   |   | 27,453 |   |   |   | 228 |   |   | 0.83 | % |
|   Time                                                         |               | 243,437 |   |               |   | 11,490  |               |   | 4.72    | %      |   |     | 256,268 |    |   |   | 11,841  |   |   | 4.62 | % |   |   | 255,599 |   |   |   | 9,520 |   |   | 3.72 | % |
|     Total      interest-bearing deposits             |               | 328,758 |   |               |   | 13,090  |               |   | 3.98    | %      |   |     | 342,601 |    |   |   | 13,490  |   |   | 3.94 | % |   |   | 356,114 |   |   |   | 11,152 |   |   | 3.13 | % |
| Short-term      borrowings (6)                                           |               | 34,449  |   |               |   | 1,244   |               |   | 3.61    | %      |   |     | 36,145  |    |   |   | 1,505   |   |   | 4.16 | % |   |   | 31,427 |   |   |   | 928 |   |   | 2.95 | % |
| Borrowed      funds                                                      |               | 119,423 |   |               |   | 5,652   |               |   | 4.73    | %      |   |     | 83,024  |    |   |   | 4,021   |   |   | 4.84 | % |   |   | 82,143 |   |   |   | 3,617 |   |   | 4.40 | % |
| Junior      subordinated debentures                                      |               | 16,496  |   |               |   | 1,065   |               |   | 6.46    | %      |   |     | 16,496  |    |   |   | 1,081   |   |   | 6.55 | % |   |   | 16,496 |   |   |   | 1,064 |   |   | 6.45 | % |
| Total      interest-bearing liabilities/                                 |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| interest      expense/average rates paid                                 |               | 499,126 |   |               |   | 21,051  |               |   | 4.22    | %      |   |     | 478,266 |    |   |   | 20,097  |   |   | 4.20 | % |   |   | 486,180 |   |   |   | 16,761 |   |   | 3.45 | % |
|                                                                     |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest      bearing liabilities:                                   |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand      deposits and escrow accounts                                 |               | 33,317  |   |               |   |    |               |   |    |   |   |     | 35,420  |    |   |   |    |   |   |   |   |   |   | 39,162 |   |   |   |   |   |   |   |   |
| Other      liabilities                                                   |               | 3,396   |   |               |   |    |               |   |    |   |   |     | 3,500   |    |   |   |    |   |   |   |   |   |   | 3,827 |   |   |   |   |   |   |   |   |
|                                                                     |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      liabilities                                                   |               | 535,839 |   |               |   |    |               |   |    |   |   |     | 517,186 |    |   |   |    |   |   |   |   |   |   | 529,169 |   |   |   |   |   |   |   |   |
|                                                                     |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stockholders'      equity                                                |               | 41,748  |   |               |   |    |               |   |    |   |   |     | 41,120  |    |   |   |    |   |   |   |   |   |   | 40,259 |   |   |   |   |   |   |   |   |
| Total      liabilities and stockholders' equity                          | $                  | 577,587 |   |               |   |    |               |   |    |   |   | $        | 558,306 |    |   |   |    |   |   |   |   |   | $ | 569,428 |   |   |   |   |   |   |   |   |
|                                                                     |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Net      interest income                               |               |    |   |               | $      | 14,547  |               |   |    |   |   |     |    |    |   | $      | 15,783  |   |   |   |   |   |   |   |   |   | $ | 18,813 |   |   |   |   |
|                                                                     |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      rate spread                                                |               |    |   |               |   |    |               |   | 2.38    | %      |   |     |    |    |   |   |    |   |   | 2.59 | % |   |   |   |   |   |   |   |   |   | 3.15 | % |
| Net      yield on interest earning assets (7)                            |               |    |   |               |   |    |               |   | 2.70    | %      |   |     |    |    |   |   |    |   |   | 2.99 | % |   |   |   |   |   |   |   |   |   | 3.49 | % |
|                                                                     |               |    |   |               |   |    |               |   |    |   |   |     |    |    |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| (1)    | The      yield information does not give effect to changes in fair value that are      reflected as a component of stockholders' equity. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------|
|   | Interest      income and yield are stated on a fully tax-equivalent basis using a 30.90%      tax rate.                                  |
| (2)    | Non-accruing      loans are included in computation of average balance, but unpaid interest      on nonperforming loans has not been     |
|   |  included      for purposes of determining interest income.                                                                         |
| (3)    | Interest      income on loans includes amortization of net deferred costs of $980 in      2008, $998 in 2007 and $946 in 2006.           |
| (4)    | Includes      Loans Held for Sale.                                                                                                       |
| (5)    | Short      term investments include FHLB overnight deposits and other      interest-bearing deposits.                                    |
| (6)    | Short-term      borrowings include securities sold under repurchase agreement and sweep      accounts.                                   |

| (7)    | The      net yield on interest-earning assets is net interest income divided by      total interest-earning assets.  The decrease in the yield      on |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | interest      earning assets was due to competitive pressure impacting interest rates      offered on new commercial real estate and commerical                  |
|   | loans      combined with declines in the prime rate affecting loans with prime-based      interest rates which decreased the average yield on                    |
|   | interest-bearing      loans and consequently the net yield on interest earning assets in the      period ended June 30, 2008 compared to the                     |
|   | periods      ended June 30, 2007 and 2006.                                                                                                                       |

----

| Table 2                                                              |   |                |    |   |   |    |   |   |   |
|----------------------------------------------------------------------|--------|---------------------|---------|--------|--------|---------|--------|--------|--------|
| Northeast      Bancorp Consolidated                                  |   |                |    |   |   |    |   |   |   |
| Investment      Securities Portfolio                                 |   |                |    |   |   |    |   |   |   |
| ($      in thousands)                                                |   |                |    |   |   |    |   |   |   |
|                                                                 |   |                |    |   |   |    |   |   |   |
|                                                                 |   | As      of June 30, |    |
|                                                                 |   | 2008                |    |   | 2007   |    |   | 2006   |   |
| Available-for-sale      (1)                                          |   |                |    |   |   |    |   |   |   |
|                                                                 |   |                |    |   |   |    |   |   |   |
| Debt      securities issued by U.S. Government-sponsored enterprisie |   |  $             | 1,313   |   |   |  $ | 21,158 |   |   |  $ | 24,694 |   |
|                                                                 |   |                |    |   |   |    |   |   |   |   |   |   |
| Mortgage-backed      securities                                      |   |                | 119,600 |   |   |    | 52,139 |   |   |   | 48,126 |   |
|                                                                 |   |                |    |   |   |    |   |   |   |   |   |   |
| Municipal      bonds                                                 |   |                | 11,112  |   |   |    | 10,709 |   |   |   | 10,770 |   |
|                                                                 |   |                |    |   |   |    |   |   |   |   |   |   |
| Corporate      bonds                                                 |   |                | 482     |   |   |    | 485    |   |   |   | 478 |   |
|                                                                 |   |                |    |   |   |    |   |   |   |   |   |   |
| Equity      securities                                               |   |                | 1,976   |   |   |    | 1,857  |   |   |   | 2,070 |   |
|                                                                 |   |                |    |   |   |    |   |   |   |   |   |   |
| Total      available-for-sale (2):                                   |   | $                   | 134,483 |   |   | $       | 86,348 |   |   | $ | 86,138 |   |

|   |                                                                                                                                                 |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)    | Carried      at estimated fair value. Northeast Bancorp does not have any securities      classified as held-to-maturity.                            |
| (2)    | Cost      of such securities ($ in thousands) was $136,459 as of June 30, 2008,      $89,249 as of June 30, 2007 and $90,111 as of June 30,    2006. |

| Table      3                                 |                 |   |   |                                      |   |   |                                       |   |   |                |   |   |   |   |   |   |   |   |   |   |   |    |   |   |
|----------------------------------------------|----------------------|--------|--------|-------------------------------------------|--------|--------|--------------------------------------------|--------|--------|---------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|
| Northeast      Bancorp Consolidated          |                 |   |   |                                      |   |   |                                       |   |   |                |   |   |   |   |   |   |   |   |   |   |   |    |   |   |
| Investment      Maturity at Fair Value       |                 |   |   |                                      |   |   |                                       |   |   |                |   |   |   |   |   |   |   |   |   |   |   |    |   |   |
| ($      in thousands)                        |                 |   |   |                                      |   |   |                                       |   |   |                |   |   |   |   |   |   |   |   |   |   |   |    |   |   |
|                                         | Within      One Year |   |   | After      One YearBut Within5      Years |   |   | After      One YearBut Within10      Years |   |   | After      10 Years |   |   | Total  |   |
|                                         | Amount               |   | Yield  |                                      |   | Amount |                                       | Yield  |   |                | Amount |   | Yield  |   |   | Amount |   | Yield  |   |   | Amount |    | Yield  |   |
| As      of June 30, 2008                     |                 |   |   |                                      |   |   |                                       |   |   |                |   |   |   |   |   |   |   |   |   |   |   |    |   |   |
| U.      S. Government-sponsored enterprises  | $                    | -      |   | 0.00                                      | %      |   | $                                          | -      |   |                | 0.00   | %      |   | $      | -      |   |   | 0.00   | %      |   | $      | 1,313   |   |   | 5.22 | % |   | $ | 1,313 |   |   | 5.22 | % |
| Mortgage-backed      securities              |                 | 227    |   | 4.82                                      | %      |   |                                       | 3,107  |   |                | 4.33   | %      |   |   | 11,793 |   |   | 4.17   | %      |   |   | 104,473 |   |   | 5.42 | % |   |   | 119,600 |   |   | 5.27 | % |
| Municipal      bonds (Tax equivalent yields) |                 | -      |   | 0.00                                      | %      |   |                                       | -      |   |                | 0.00   | %      |   |   | 215    |   |   | 6.00   | %      |   |   | 10,897  |   |   | 5.89 | % |   |   | 11,112 |   |   | 5.89 | % |
| Corporate      bonds                         |                 | -      |   | 0.00                                      | %      |   |                                       | 482    |   |                | 4.05   | %      |   |   | -      |   |   | 0.00   | %      |   |   | -       |   |   | 0.00 | % |   |   | 482 |   |   | 4.05 | % |
| Equity      securities                       |                 | 1,976  |   | 3.32                                      | %      |   |                                       | -      |   |                | 0.00   | %      |   |   | -      |   |   | 0.00   | %      |   |   | -       |   |   | 0.00 | % |   |   | 1,976 |   |   | 3.32 | % |
|                                         | $                    | 2,203  |   | 3.48                                      | %      |   | $                                          | 3,589  |   |                | 4.29   | %      |   | $      | 12,008 |   |   | 4.20   | %      |   | $      | 116,683 |   |   | 5.46 | % |   | $ | 134,483 |   |   | 5.28 | % |
|                                         |                 |   |   |                                      |   |   |                                       |   |   |                |   |   |   |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |
|                                         |                 |   |   |                                      |   |   |                                       |   |   |                |   |   |   |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |
| As      of June 30, 2007                     |                 |   |   |                                      |   |   |                                       |   |   |                |   |   |   |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |
| U.      S. Government-sponsored enterprises  | $                    | 6,410  |   | 3.26                                      | %      |   | $                                          | 12,505 |   |                | 4.31   | %      |   | $      | 973    |   |   | 5.14   | %      |   | $      | 1,270   |   |   | 5.23 | % |   | $ | 21,158 |   |   | 4.09 | % |
| Mortgage-backed      securities              |                 | 1,295  |   | 4.63                                      | %      |   |                                       | -      |   |                | 0.00   | %      |   |   | 19,202 |   |   | 4.19   | %      |   |   | 31,642  |   |   | 5.26 | % |   |   | 52,139 |   |   | 4.85 | % |
| Municipal      bonds (Tax equivalent yields) |                 | -      |   | 0.00                                      | %      |   |                                       | -      |   |                | 0.00   | %      |   |   | -      |   |   | 0.00   | %      |   |   | 10,709  |   |   | 5.97 | % |   |   | 10,709 |   |   | 5.97 | % |
| Corporate      bonds                         |                 | -      |   | 0.00                                      | %      |   |                                       | 485    |   |                | 4.05   | %      |   |   | -      |   |   | 0.00   | %      |   |   | -       |   |   | 0.00 | % |   |   | 485 |   |   | 4.05 | % |
| Equity      securities                       |                 | 1,857  |   | 4.99                                      | %      |   |                                       | -      |   |                | 0.00   | %      |   |   | -      |   |   | 0.00   | %      |   |   | -       |   |   | 0.00 | % |   |   | 1,857 |   |   | 4.99 | % |
|                                         | $                    | 9,562  |   | 3.78                                      | %      |   | $                                          | 12,990 |   |                | 4.30   | %      |   | $      | 20,175 |   |   | 4.24   | %      |   | $      | 43,621  |   |   | 5.43 | % |   | $ | 86,348 |   |   | 4.80 | % |

----

| Table      4                        |   |               |    |   |               |   |   |               |   |   |               |   |   |               |   |   |             |   |    |   |   |   |             |   |   |   |    |   |             |   |
|-------------------------------------|--------|--------------------|---------|--------|--------------------|--------|--------|--------------------|--------|--------|--------------------|--------|--------|--------------------|--------|--------|------------------|--------|---------|--------|--------|--------|------------------|--------|--------|--------|---------|--------|------------------|--------|
| Northeast      Bancorp Consolidated |   |               |    |   |               |   |   |               |   |   |               |   |   |               |   |   |             |   |    |   |   |   |             |   |   |
| Loan      Portfolio                 |   |               |    |   |               |   |   |               |   |   |               |   |   |               |   |   |             |   |    |   |   |   |             |   |   |   |    |   |             |   |
| ($      in thousands)               |   |               |    |   |               |   |   |               |   |   |               |   |   |               |   |   |             |   |    |   |   |   |             |   |   |   |    |   |             |   |
|                                |   |               |    |   |               |   |   |               |   |   |               |   |   |               |   |   |             |   |    |   |   |   |             |   |   |   |    |   |             |   |
|                                |   | As      of         |    |
|                                |   | June      30, 2008 |    |   | June      30, 2007 |   |   | June      30, 2006 |   |   | June      30, 2005 |   |   | June      30, 2004 |   |
|                                |   |               |    |   |               |   |   |               |   |   |               |   |   |               |   |   |             |   |    |   |   |   |             |   |   |   |    |   |             |   |
|                                |   |               |    |   | Percent      of    |   |   |               |   |   | Percent      of    |   |   |               |   |   | Percent      of  |   |    |   |   |   | Percent      of  |   |   |   |    |   | Percent      of  |   |
|                                |   | Amount             |    |   | Total      Loans   |   |   | Amount             |   |   | Total      Loans   |   |   | Amount             |   |   | Total      Loans |   |    | Amount |   |   | Total      Loans |   |   | Amount |    |   | Total      Loans |   |
|                                |   |               |    |   |               |   |   |               |   |   |               |   |   |               |   |   |             |   |    |   |   |   |             |   |   |   |    |   |             |   |
| Loan      portfolio:                |   |               |    |   |               |   |   |               |   |   |               |   |   |               |   |   |             |   |    |   |   |   |             |   |   |   |    |   |             |   |
|                                |   |               |    |   |               |   |   |               |   |   |               |   |   |               |   |   |             |   |    |   |   |   |             |   |   |   |    |   |             |   |
| Residential      real estate        |   | $                  | 140,244 |   |               |   | 34.49  | %                  |   | $      | 145,184            |   |   |               | 34.34  | %      |             | $      | 149,100 |   |   |   | 34.44            | %      |   | $      | 148,840 |   |             |   | 32.46 | % |   | $ | 138,031 |   |   |   | 32.10 | % |
| Commercial      real estate         |   |               | 111,223 |   |               |   | 27.36  | %                  |   |   | 112,535            |   |   |               | 26.61  | %      |             |   | 115,327 |   |   |   | 26.63            | %      |   |   | 125,899 |   |             |   | 27.46 | % |   |   | 127,866 |   |   |   | 29.74 | % |
| Construction                        |   |               | 4,537   |   |               |   | 1.12   | %                  |   |   | 5,451              |   |   |               | 1.29   | %      |             |   | 5,106   |   |   |   | 1.18             | %      |   |   | 12,201  |   |             |   | 2.66 | % |   |   | 8,367 |   |   |   | 1.95 | % |
| Commercial                          |   |               | 33,516  |   |               |   | 8.24   | %                  |   |   | 40,784             |   |   |               | 9.64   | %      |             |   | 50,262  |   |   |   | 11.61            | %      |   |   | 68,716  |   |             |   | 14.99 | % |   |   | 64,304 |   |   |   | 14.95 | % |
| Consumer      and other             |   |               | 117,047 |   |               |   | 28.79  | %                  |   |   | 118,881            |   |   |               | 28.12  | %      |             |   | 113,192 |   |   |   | 26.14            | %      |   |   | 102,865 |   |             |   | 22.43 | % |   |   | 91,434 |   |   |   | 21.26 | % |
|                                |   |               |    |   |               |   |   |               |   |   |               |   |   |               |   |   |             |   |    |   |   |   |             |   |   |   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Total      loans                    |   |               | 406,567 |   |               |   | 100.00 | %                  |   |   | 422,835            |   |   |               | 100.00 | %      |             |   | 432,987 |   |   |   | 100.00           | %      |   |   | 458,521 |   |             |   | 100.00 | % |   |   | 430,002 |   |   |   | 100.00 | % |
|                                |   |               |    |   |               |   |   |               |   |   |               |   |   |               |   |   |             |   |    |   |   |   |             |   |   |   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net      deferred loan costs        |   |               | 2,627   |   |               |   |   |               |   |   | 2,736              |   |   |               |   |   |             |   | 2,676   |   |   |   |             |   |   |   | 2,531   |   |             |   |   |   |   |   | 2,592 |   |   |   |   |   |
| Less:                               |   |               |    |   |               |   |   |               |   |   |               |   |   |               |   |   |             |   |    |   |   |   |             |   |   |   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Allowance      for loan losses      |   |               | 5,656   |   |               |   |   |               |   |   | 5,756              |   |   |               |   |   |             |   | 5,496   |   |   |   |             |   |   |   | 5,104   |   |             |   |   |   |   |   | 4,577 |   |   |   |   |   |
|                                |   |               |    |   |               |   |   |               |   |   |               |   |   |               |   |   |             |   |    |   |   |   |             |   |   |   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net      loans                      |   | $                  | 403,538 |   |               |   |   |               |   | $      | 419,815            |   |   |               |   |   |             | $      | 430,167 |   |   |   |             |   |   | $      | 455,948 |   |             |   |   |   |   | $ | 428,017 |   |   |   |   |   |

| Table      5                                            |   |        |    |   |        |   |    |         |   |   |         |   |   |   |    |
|---------------------------------------------------------|--------|-------------|---------|--------|-------------|--------|---------|--------------|--------|--------|--------------|--------|--------|--------|---------|
| Northeast      Bancorp Consolidated                     |   |        |    |   |        |   |    |         |   |   |         |   |   |
| Maturities      and Repricing of Loans ($ in thousands) |   |        |    |   |        |   |    |         |   |   |
| As      of June 30, 2008                                |   |        |    |   |        |   |    |         |   |   |         |   |   |
|                                                    |   |        |    |   |        |   |    |         |   |   |         |   |   |   |    |
|                                                    |   | 1      Year |    |   | 1      to 5 |   |    | 5      to 10 |   |   | Over      10 |   |   | Total  |    |
|                                                    |   | or Less     |    |   | Years       |   |    | Years        |   |   | Years        |   |   | Loans  |    |
| Mortgages:                                              |   |        |    |   |        |   |    |         |   |   |         |   |   |   |    |
| Residential                                             |   | $           | 28,602  |   |        | $      | 22,880  |         |   | $      | 19,111       |   |   | $      | 69,651  |   |   | $ | 140,244 |   |
| Commercial                                              |   |        | 41,359  |   |        |   | 63,540  |         |   |   | 5,510        |   |   |   | 814     |   |   |   | 111,223 |   |
| Construction                                            |   |        | 4,275   |   |        |   | 262     |         |   |   | -            |   |   |   | -       |   |   |   | 4,537 |   |
|                                                    |   |        |    |   |        |   |    |         |   |   |         |   |   |   |    |   |   |   |   |   |
| Non-mortgage      loans:                                |   |        |    |   |        |   |    |         |   |   |         |   |   |   |    |   |   |   |   |   |
| Commercial                                              |   |        | 21,028  |   |        |   | 11,396  |         |   |   | 1,092        |   |   |   | -       |   |   |   | 33,516 |   |
| Consumer      and other                                 |   |        | 1,537   |   |        |   | 35,155  |         |   |   | 26,953       |   |   |   | 53,402  |   |   |   | 117,047 |   |
|                                                    |   |        |    |   |        |   |    |         |   |   |         |   |   |   |    |   |   |   |   |   |
| Total      loans                                        |   | $           | 96,801  |   |        | $      | 133,233 |         |   | $      | 52,666       |   |   | $      | 123,867 |   |   | $ | 406,567 |   |
|                                                    |   |        |    |   |        |   |    |         |   |   |         |   |   |   |    |   |   |   |   |   |
| Type      of interest rate:                             |   |        |    |   |        |   |    |         |   |   |         |   |   |   |    |   |   |   |   |   |
| Predetermined      rate, maturity                       |   |        |    |   |        |   |    |         |   |   |         |   |   |   |    |   |   |   |   |   |
| greater      than 1 year                                |   | $           | 221,455 |   |        |   |    |         |   |   |         |   |   |   |    |   |   |   |   |   |
| Floating      or adjustable rate                        |   |        |    |   |        |   |    |         |   |   |         |   |   |   |    |   |   |   |   |   |
| due      after one year                                 |   |        | 88,311  |   |        |   |    |         |   |   |         |   |   |   |    |   |   |   |   |   |
|                                                    |   |        |    |   |        |   |    |         |   |   |         |   |   |   |    |   |   |   |   |   |
| Total      due after 1 year:                            |   | $           | 309,766 |   |        |   |    |         |   |   |         |   |   |   |    |   |   |   |   |   |
|                                                    |   |        |    |   |        |   |    |         |   |   |         |   |   |   |    |   |   |   |   |   |

| Scheduled      repayments are reported in the maturity category in which the payment is      due.  Demand loans and overdrafts are reported in one |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        year or less. Maturities are based upon contract  terms.                                                                                         |

----

| Table      6                                               |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
|------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|
| Northeast      Bancorp Consolidated                        |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
| Summary      of Loan Losses Experience                     |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
| ($      in thousands)                                      |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
|                                                       |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
|                                                       |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
| As      of or For Years Ended June 30,                     |   | 2008   |    |   | 2007   |   |    | 2006   |   |   | 2005    |   |   | 2004   |    |
|                                                       |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
| Average      net loans outstanding during the period (1)   |   | $      | 413,794 |   |   | $      | 432,539 |   |   | $      | 448,070 |   |   | $      | 452,951 |   |   | $ | 395,774 |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      loans at end of period (1)                      |   | $      | 409,194 |   |   | $      | 425,571 |   |   | $      | 435,663 |   |   | $      | 461,052 |   |   | $ | 432,594 |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Allowance      at beginning of period                      |   | $      | 5,756   |   |   | $      | 5,496   |   |   | $      | 5,104   |   |   | $      | 4,577   |   |   | $ | 4,016 |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Loans      charged-off during the period:                  |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Residential      real estate                               |   |   | 70      |   |   |   | 60      |   |   |   | 15      |   |   |   | 67      |   |   |   | 142 |   |
| Commercial      real estate                                |   |   | 184     |   |   |   | 6       |   |   |   | 35      |   |   |   | 7       |   |   |   | 124 |   |
| Commercial                                                 |   |   | 237     |   |   |   | 251     |   |   |   | 326     |   |   |   | 389     |   |   |   | 49 |   |
| Consumer      and other                                    |   |   | 632     |   |   |   | 538     |   |   |   | 417     |   |   |   | 472     |   |   |   | 422 |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      loans charged-off                               |   |   | 1,123   |   |   |   | 855     |   |   |   | 793     |   |   |   | 935     |   |   |   | 737 |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Recoveries      on loans previously charged-off:           |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Residential      real estate                               |   |   | 0       |   |   |   | 1       |   |   |   | 1       |   |   |   | 0       |   |   |   | 60 |   |
| Commercial      real estate                                |   |   | 6       |   |   |   | 26      |   |   |   | 25      |   |   |   | 10      |   |   |   | 34 |   |
| Commercial                                                 |   |   | 134     |   |   |   | 4       |   |   |   | 6       |   |   |   | 41      |   |   |   | 120 |   |
| Consumer      and other                                    |   |   | 47      |   |   |   | 95      |   |   |   | 131     |   |   |   | 109     |   |   |   | 122 |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      recoveries                                      |   |   | 187     |   |   |   | 126     |   |   |   | 163     |   |   |   | 160     |   |   |   | 336 |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Net      loans charged off during the period               |   |   | 936     |   |   |   | 729     |   |   |   | 630     |   |   |   | 775     |   |   |   | 401 |   |
| Provision      for loan losses                             |   |   | 836     |   |   |   | 989     |   |   |   | 1,226   |   |   |   | 1,302   |   |   |   | 962 |   |
| Reclassified      to off-balance sheet credit risk reserve |   |   | 0       |   |   |   | 0       |   |   |   | (204    | )      |   |   | 0       |   |   |   | 0 |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Allowance      at end of period                            |   | $      | 5,656   |   |   | $      | 5,756   |   |   | $      | 5,496   |   |   | $      | 5,104   |   |   | $ | 4,577 |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Ratio      of net charge-offs to average loans outstanding |   |   | 0.23    | %      |   |   | 0.17    | %      |   |   | 0.14    | %      |   |   | 0.17    | % |   |   | 0.10 | % |
|                                                       |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Allowance      as a percentage of total loans              |   |   | 1.38    | %      |   |   | 1.35    | %      |   |   | 1.26    | %      |   |   | 1.11    | % |   |   | 1.06 | % |
|                                                       |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Allowance      as a percentage of                          |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| non-performing      and nonaccrual loans (2)               |   |   | 73.43   | %      |   |   | 113.08  | %      |   |   | 105.79  | %      |   |   | 300.59  | % |   |   | 272.93 | % |
|                                                       |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |

| (1)    | Excludes      loans held for sale.                                                                                                                  |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |
| (2)    | The      increase in non-performing loans in fiscal 2008, 2007 and 2006 caused the      allowance as a percentage of non-performing and  nonaccrual |
|   | loans      to decrease compared to prior years. At June 30, 2008, non-performing and      non-accrual loans totaled $7,703, an increase of $2,613   |
|   | compared      to June 30, 2007.  See Table 8 for additional  information.                                                                      |
|   |                                                                                                                                                |
|   | Management      believes that the allowance for loan losses isadequate.                                                                             |
|   |                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |
|   | For      each period indicated, this table summarizes loans outstanding at the end      of each period, the average amount of loansoutstanding,     |
|   | changes      in the allowance for loan losses, and other selected      statistics.                                                                  |

----

| Table      7                                                   |   |               |   |   |               |               |   |               |   |   |               |               |   |               |   |   |   |               |   |   |   |   |   |               |   |   |   |   |   |               |
|----------------------------------------------------------------|--------|--------------------|--------|--------|--------------------|--------------------|--------|--------------------|--------|--------|--------------------|--------------------|--------|--------------------|--------|--------|--------|--------------------|--------|--------|--------|--------|--------|--------------------|--------|--------|--------|--------|--------|--------------------|
| Northeast      Bancorp Consolidated                            |   |               |   |   |               |               |   |               |   |   |               |               |   |               |   |   |   |               |   |   |   |   |   |               |   |
| Allowance      for Loan Losses                                 |   |               |   |   |               |               |   |               |   |   |               |               |   |               |   |   |   |               |   |   |   |   |   |               |   |   |   |   |   |               |
| ($      in thousands)                                          |   |               |   |   |               |               |   |               |   |   |               |               |   |               |   |   |   |               |   |   |   |   |   |               |   |   |   |   |   |               |
|                                                           |   |               |   |   |               |               |   |               |   |   |               |               |   |               |   |   |   |               |   |   |   |   |   |               |   |   |   |   |   |               |   |
| As      of                                                     |   | June      30, 2008 |   |   | June      30, 2007 |               |   | June      30, 2006 |   |   | June      30, 2005 |               |   | June      30, 2004 |   |
|                                                           |   |               |   |   |               |               |   |               |   |   |               |               |   |               |   |   |   |               |   |   |   |   |   |               |   |   |   |   |   |               |   |
|                                                           |   |               |   |   |               | Percent      of    |   |               |   |   |               | Percent      of    |   |               |   |   |   | Percent      of    |   |   |   |   |   | Percent      of    |   |   |   |   |   | Percent      of    |   |
|                                                           |   |               |   |   |               | Loans      in Each |   |               |   |   |               | Loans      in Each |   |               |   |   |   | Loans      in Each |   |   |   |   |   | Loans      in Each |   |   |   |   |   | Loans      in Each |   |
|                                                           |   |               |   |   |               | Category      to   |   |               |   |   |               | Category      to   |   |               |   |   |   | Category      to   |   |   |   |   |   | Category      to   |   |   |   |   |   | Category      to   |   |
|                                                           |   |               | Amount |   |               | Total Loans        |   |               | Amount |   |               | Total Loans        |   |               | Amount |   |   | Total Loans        |   |   | Amount |   |   | Total Loans        |   |   | Amount |   |   | Total Loans        |   |
| Allocation      of allowance for   loan losses: |   |               |   |   |               |               |   |               |   |   |               |               |   |               |   |   |   |               |   |   |   |   |   |               |   |   |   |   |   |               |
| Residential      real estate                                   |   | $                  | 1,343  |   |               |               | 34.49  | %                  |   | $      | 808                |               |   |               | 34.34  | %      |   | $                  | 672    |   |   |   | 34.44  | %                  |   | $      | 730    |   |   |               | 32.46 | % |   | $ | 636 |   |   |   | 32.10 | % |
| Commercial      real estate                                    |   |               | 1,530  |   |               |               | 27.36  | %                  |   |   | 2,000              |               |   |               | 26.61  | %      |   |               | 2,156  |   |   |   | 26.63  | %                  |   |   | 1,670  |   |   |               | 27.46 | % |   |   | 989 |   |   |   | 29.74 | % |
| Construction                                                   |   |               | 81     |   |               |               | 1.12   | %                  |   |   | 64                 |               |   |               | 1.29   | %      |   |               | 56     |   |   |   | 1.18   | %                  |   |   | 69     |   |   |               | 2.66 | % |   |   | 48 |   |   |   | 1.95 | % |
| Commercial                                                     |   |               | 940    |   |               |               | 8.24   | %                  |   |   | 1,042              |               |   |               | 9.64   | %      |   |               | 1,037  |   |   |   | 11.61  | %                  |   |   | 753    |   |   |               | 14.99 | % |   |   | 1,374 |   |   |   | 14.95 | % |
| Consumer      and other                                        |   |               | 1,654  |   |               |               | 28.79  | %                  |   |   | 1,667              |               |   |               | 28.12  | %      |   |               | 1,470  |   |   |   | 26.14  | %                  |   |   | 1,737  |   |   |               | 22.43 | % |   |   | 1,530 |   |   |   | 21.26 | % |
| Unallocated                                                    |   |               | 108    |   |               |               | 0.00   | %                  |   |   | 175                |               |   |               | 0.00   | %      |   |               | 105    |   |   |   | 0.00   | %                  |   |   | 145    |   |   |               | 0.00 | % |   |   | 0 |   |   |   | 0.00 | % |
|                                                           |   |               |   |   |               |               |   |               |   |   |               |               |   |               |   |   |   |               |   |   |   |   |   |               |   |   |   |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
|                                                           | Total  |               | $      | 5,656  |               |               |   | 100.00             | %      |   | $                  | 5,756              |   |               |   | 100.00 | %      |               | $      | 5,496  |   |   |   | 100.00             | %      |   | $      | 5,104  |   |               |   | 100.00 | % |   | $ | 4,577 |   |   |   | 100.00 | % |
|                                                           |   |               |   |   |               |               |   |               |   |   |               |               |   |               |   |   |   |               |   |   |   |   |   |               |   |   |   |   |   |               |   |   |   |   |   |   |   |   |   |   |   |

| This      table shows how the allowance for loan losses was allocated for the      periods indicated.                                                                       |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The      allowance for loan losses is established through a provision for loan      losses charged to operations.  Loan losses are charged against      the  |
| allowance      when management believes that the collectibility of the loan principal is      unlikely.  Recoveries on loans previoulsy charged offare                 |
| credited      to the allowance.                                                                                                                                             |
|                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The      allowance is an amount that management believes will be adequate to absorb      probable loan losses based on evaluations of  collectibility                       |
| and      prior loss experience.  The evaluation takes into consideration      such factors as changes in the nature and volume of the portfolio,      overall     |
| portfolio      quality, specific probles loans, and current econonic conditions that may      affect the borrowers' ability to  pay.  Management      also   |
| obtains      collateral appraisals when considerednecessary.                                                                                                           |

| Table      8                                  |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
|-----------------------------------------------|--------|---------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Northeast      Bancorp Consolidated           |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-performing      Loans                     |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  ($      in thousands)                   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   | As      of June 30, |   |
|                                          |   | 2008                |   |   | 2007   |   |   | 2006   |   |   | 2005   |   |   | 2004   |   |
| Nonaccrual      loans:                        |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential      real estate                  |   | $                   | 1,390  |   |   | $      | 439    |   |   | $      | 521    |   |   | $      | 515    |   |   | $ | 214 |   |
| Construction      loans                       |   |                | 101    |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | - |   |
| Commercial      real estate                   |   |                | 1,430  |   |   |   | 1,444  |   |   |   | 1,260  |   |   |   | 33     |   |   |   | 47 |   |
| Commercial      loans                         |   |                | 1,638  |   |   |   | 708    |   |   |   | 1,423  |   |   |   | 3      |   |   |   | 85 |   |
| Consumer      and other                       |   |                | 634    |   |   |   | 461    |   |   |   | 109    |   |   |   | 60     |   |   |   | 101 |   |
|    Total      nonaccrual loans |   |                | 5,193  |   |   |   | 3,052  |   |   |   | 3,313  |   |   |   | 611    |   |   |   | 447 |   |
|                                          |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current      nonaccrual loans (1)             |   |                | 2,510  |   |   |   | 2,038  |   |   |   | 1,882  |   |   |   | 1,087  |   |   |   | 1,230 |   |
| Total      non-performing loans (2)           |   |                | 7,703  |   |   |   | 5,090  |   |   |   | 5,195  |   |   |   | 1,698  |   |   |   | 1,677 |   |
| Acquired      assets                          |   |                | 678    |   |   |   | -      |   |   |   | 10     |   |   |   | 89     |   |   |   | 39 |   |
| Total      non-performing assets              |   | $                   | 8,381  |   |   | $      | 5,090  |   |   | $      | 5,205  |   |   | $      | 1,787  |   |   | $ | 1,716 |   |
|                                          |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-performing      loans to total loans      |   |                | 1.88   | %      |   |   | 1.20   | %      |   |   | 1.19   | %      |   |   | 0.37   | % |   |   | 0.39 | % |
| Non-performing      assets to total assets    |   |                | 1.40   | %      |   |   | 0.91   | %      |   |   | 0.92   | %      |   |   | 0.31   | % |   |   | 0.32 | % |
|                                          |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| As      of June 30, 2008, there were no troubled debt restructured      loans.                                                                               |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| See      additional information concerning non-performing and impaired loans in      note 3 of the audited consolidated financial statements as well      as |
| in      the Management's Discussion and Analysis.                                                                                                            |
|                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |
|  (1)                                                                                                                                                    | Nonaccrual      residential real estate loans increased due to the number in      process of foreclosure. There were |
|                                                                                                                                                         | no      significant losses expected. |
|                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |
|  (2)                                                                                                                                                    | As      of June 30, 2008, comprised of commercial real estate loans of      $928, commercial loans of      $1,576 |
|                                                                                                                                                         | and      consumer loans of $6. |
|                                                                                                                                                         |   |
|  (3)                                                                                                                                                    | Total      non-performing loans increased in fiscal 2008, 2007 and 2006 as compared      to prior years primarily from residential |
|                                                                                                                                                         | real      estate and commercial loans. Loans past due 90 days or more and      discretionary actions by management      to place |
|                                                                                                                                                         | loans      on non-accrual account for the increase in both      portfolios.  Estimated credit losses were included in the      determination |
|                                                                                                                                                         | of      the adequacy of the allowance for loanlosses. |

----

| Table      9                                     |               |    |   |               |   |   |               |   |   |   |   |   |   |    |     |      |   |   |   |   |   |   |     |   |      |    |
|--------------------------------------------------|--------------------|---------|--------|--------------------|--------|--------|--------------------|--------|--------|--------|--------|--------|--------|---------|----------|-----------|--------|--------|--------|--------|--------|--------|----------|--------|-----------|---------|
| Northeast      Bancorp Consolidated              |               |    |   |               |   |   |               |   |   |   |   |   |   |    |     |      |   |   |   |   |   |   |     |   |      |
| Average      Deposits ($ in thousands) and Rates |               |    |   |               |   |   |               |   |   |   |   |   |   |    |     |      |   |   |   |
|                                             |               |    |   |               |   |   |               |   |   |   |   |   |   |    |     |      |   |   |   |   |   |   |     |   |      |    |
| For      Years Ended                             | June      30, 2008 |    |   | June      30, 2007 |   |   | June      30, 2006 |   |
|                                             |               |    |   |               |   |   | %      of          |   |   |   |   |   |   |    |     | %      of |   |   |   |   |   |   |     |   | %      of |    |
|                                             | Amount             |    |   | Rate               |   |   | Deposits           |   | Amount |   |   | Rate   |   |    | Deposits |      | Amount |   |   | Rate   |   |   | Deposits |
|                                             |               |    |   |               |   |   |               |   |   |   |   |   |   |    |     |      |   |   |   |   |   |   |     |   |      |    |
| Average      deposits:                           |               |    |   |               |   |   |               |   |   |   |   |   |   |    |     |      |   |   |   |   |   |   |     |   |      |    |
|                                             |               |    |   |               |   |   |               |   |   |   |   |   |   |    |     |      |   |   |   |   |   |   |     |   |      |    |
| Non-interest      bearing demand deposits        |               |    |   |               |   |   |               |   |   |   |   |   |   |    |     |      |   |   |   |   |   |   |     |   |      |    |
|    and      escrow accounts       | $                  | 33,317  |   |               |   | 0.00   | %                  |   |   | 9.20   | %      |   | $      | 35,420  |     |      |   | 0.00   | %      |   |   | 9.37   | %        |   | $         | 39,162  |   |   |   | 0.00 | % |   |   | 9.91 | % |
| Regular      savings                             |               | 20,398  |   |               |   | 0.79   | %                  |   |   | 5.63   | %      |   |   | 22,309  |     |      |   | 0.87   | %      |   |   | 5.90   | %        |   |      | 27,453  |   |   |   | 0.83 | % |   |   | 6.95 | % |
| NOW      and money market                        |               | 64,923  |   |               |   | 2.22   | %                  |   |   | 17.93  | %      |   |   | 64,024  |     |      |   | 2.27   | %      |   |   | 16.94  | %        |   |      | 73,062  |   |   |   | 1.92 | % |   |   | 18.48 | % |
| Time      deposits                               |               | 243,437 |   |               |   | 4.72   | %                  |   |   | 67.24  | %      |   |   | 256,268 |     |      |   | 4.62   | %      |   |   | 67.79  | %        |   |      | 255,599 |   |   |   | 3.72 | % |   |   | 64.66 | % |
|                                             |               |    |   |               |   |   |               |   |   |   |   |   |   |    |     |      |   |   |   |   |   |   |     |   |      |    |   |   |   |   |   |   |   |   |   |
| Total      average deposits                      | $                  | 362,075 |   |               |   | 3.62   | %                  |   |   | 100.00 | %      |   | $      | 378,021 |     |      |   | 3.57   | %      |   |   | 100.00 | %        |   | $         | 395,276 |   |   |   | 2.82 | % |   |   | 100.00 | % |
|                                             |               |    |   |               |   |   |               |   |   |   |   |   |   |    |     |      |   |   |   |   |   |   |     |   |      |    |   |   |   |   |   |   |   |   |   |

| This      table shows the average daily amount of deposits and average rates paid on      such deposits for the periodsindicated. |
|-----------------------------------------------------------------------------------------------------------------------------------|

| Table      10                                                  |   |    |   |
|----------------------------------------------------------------|--------|---------|--------|
| Northeast      Bancorp Consolidated                            |   |    |   |
| Maturities      of Certificates of Deposit $100,000 & Over |   |    |   |
| As      of June 30, 2008                                       |   |    |   |
| ($      in thousands)                                          |   |    |   |
|                                                           |   |    |   |
|                                                           |   |    |   |
|                                                           |   | Balance |   |
|                                                           |   |    |   |
| 3      months or less                                          |   | $       | 36,203 |   |
| Over      3 through 6 months                                   |   |    | 12,638 |   |
| Over      6 through 12 months                                  |   |    | 19,310 |   |
| Over      12 months                                            |   |    | 10,187 |   |
|                                                           |   |    |   |   |
| Total      certificates of deposit $100,000 & over         |   | $       | 78,338 |   |

| Table      11                             |   |                                   |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |
|-------------------------------------------|--------|----------------------------------------|--------|--------|----------|--------|--------|---------|--------|--------|----------|--------|--------|---------|--------|--------|----------|--------|
| Northeast      Bancorp Consolidated       |   |                                   |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |
| Short-term      Borrowings                |   |                                   |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |
| ($      in thousands)                     |   |                                   |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |
|                                      |   |                                   |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |
|                                      |   | As      of or For Years Ended June 30, |   |
|                                      |   | 2008                                   |   |   | 2007     |   |   | 2006    |   |
|                                      |   |                                   |   |   | Weighted |   |   |    |   |   | Weighted |   |   |    |   |   | Weighted |   |
|                                      |   | Balance                                |   |   | Rate     |   |   | Balance |   |   | Rate     |   |   | Balance |   |   | Rate     |   |
|                                      |   |                                   |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |
| Balance      at year end                  |   | $                                      | 32,841 |   |     |   | 2.50   | %       |   | $      | 33,105   |   |   |    | 4.28   | %      |     | $      | 29,637 |   |   |   | 3.79 | % |
|                                      |   |                                   |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |   |   |   |   |   |   |
| Average      outstanding during year      |   |                                   | 34,449 |   |     |   | 3.61   | %       |   |   | 36,145   |   |   |    | 4.16   | %      |     |   | 31,427 |   |   |   | 2.95 | % |
|                                      |   |                                   |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |   |   |   |   |   |   |
| Maximum      outstanding at any month end |   |                                   | 40,076 |   |     |   |   |    |   |   | 44,164   |   |   |    |   |   |     |   | 37,237 |   |   |   |   |   |
|                                      |   |                                   |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |   |   |   |   |   |   |

| Short-term      borrowings consist of securities sold under agreements to repurchase and      other sweep accounts.           |
|----------------------------------------------------------------------------------------------------------------------------------------------|
| These      borrowings were scheduled to mature within 180 days. Securities sold under      agreements to repurchase                          |
| were      collateralized      by mortgage-backed and U.S. Government-sponsored enterprise      securities with a fair value             |
|  of      $28,551,000 and amortized cost of $29,016,000 at June 30, 2008, and a fair      value of $31,530,000 and amortized cost        |
| of      $30,348,000 at June 30, 2007.  Other sweep accounts      have excess deposit insurance coverage of $7,630,000 at June |
|  30,      2008. Securities      sold under these agreements were under the control of the Company      throughout 2008 and2007.         |

| Table      12                                       |   |                          |   |   |     |   |   |    |   |   |     |   |   |    |   |     |   |   |
|-----------------------------------------------------|--------|-------------------------------|--------|--------|----------|--------|--------|---------|--------|--------|----------|--------|--------|---------|--------|----------|--------|--------|
| Northeast      Bancorp Consolidated                 |   |                          |   |   |     |   |   |    |   |   |     |   |   |    |   |     |   |   |
| FHLB      Advances Due in 1 Year or  Less |   |                          |   |   |     |   |   |    |   |   |     |   |   |    |   |     |   |   |
| ($      in thousands)                               |   |                          |   |   |     |   |   |    |   |   |     |   |   |    |   |     |   |   |
|                                                |   |                          |   |   |     |   |   |    |   |   |     |   |   |    |   |     |   |   |
|                                                |   | For      Years Ended June 30, |   |
|                                                |   | 2008                          |   |   | 2007     |   |   | 2006    |   |
|                                                |   |                          |   |   | Weighted |   |   |    |   |   | Weighted |   |   |    |   | Weighted |   |
|                                                |   | Balance                       |   |   | Rate     |   |   | Balance |   |   | Rate     |   |   | Balance |   |     | Rate   |   |
|                                                |   |                          |   |   |     |   |   |    |   |   |     |   |   |    |   |     |   |   |
| Balance      at year end                            |   | $                             | 55,575 |   |     |   | 3.70   | %       |   | $      | 50,017   |   |   |    | 5.17   | %        |   | $      | 34,832 |   |   |   | 4.03 | % |
|                                                |   |                          |   |   |     |   |   |    |   |   |     |   |   |    |   |     |   |   |   |   |   |   |   |   |
| Average      outstanding during year                |   |                          | 44,870 |   |     |   | 4.47   | %       |   |   | 34,672   |   |   |    | 4.45   | %        |   |   | 38,606 |   |   |   | 4.27 | % |
|                                                |   |                          |   |   |     |   |   |    |   |   |     |   |   |    |   |     |   |   |   |   |   |   |   |   |
| Maximum      outstanding at any month end           |   |                          | 55,575 |   |     |   |   |    |   |   | 50,017   |   |   |    |   |     |   |   | 49,306 |   |   |   |   |   |
|                                                |   |                          |   |   |     |   |   |    |   |   |     |   |   |    |   |     |   |   |   |   |   |   |   |   |

| This      table shows the Federal Home Loan Advances the Company had due to mature      in one year or less as of June 30, 2008, 2007 and  2006. |
|--------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Table      13                                                                                    |   |                               |     |   |   |   |     |        |   |   |    |   |   |      |    |
|--------------------------------------------------------------------------------------------------|--------|------------------------------------|----------|--------|--------|--------|----------|-------------|--------|--------|---------|--------|--------|-----------|---------|
| Northeast      Bancorp Consolidated                                                              |   |                               |     |   |   |   |     |        |   |   |    |   |   |      |    |
| Maturities      and Repricing of Interest-earning Assets & Interest-bearing      Liabilities |   |                               |     |   |   |   |     |
| As      of June 30, 2008                                                                         |   |                               |     |   |   |   |     |        |   |   |    |   |   |      |    |
| ($      in thousands)                                                                            |   |                               |     |   |   |   |     |        |   |   |    |   |   |      |    |
|                                                                                             |   |                               |     |   |   |   |     |        |   |   |    |   |   |      |    |
|                                                                                             |   | Term      to Repricing or Maturity |     |
|                                                                                             |   | Less      Than                     |     |   | 1-5    |   |     | Over      5 |   |   |    |   |   | %      of |    |
|                                                                                             |   | 1      Year                        |     |   | Years  |   |     | Years       |   |   | Total   |   |   | Total     |    |
| Interest-earning      assets:                                                                    |   |                               |     |   |   |   |     |        |   |   |    |   |   |      |    |   |
| Investment      securities                                                                       |   | $                                  | 2,203    |   |   | $      | 3,589    |        |   | $      | 128,691 |   |   | $         | 134,483 |   |   |   | 24.44 | % |
| Regulatory      stock                                                                            |   |                               | 4,889    |   |   |   | -        |        |   |   | 472     |   |   |      | 5,361   |   |   |   | 0.97 | % |
| Short-term      investments (1)                                                                  |   |                               | 3,953    |   |   |   | -        |        |   |   | -       |   |   |      | 3,953   |   |   |   | 0.72 | % |
|                                                                                             |   |                               |     |   |   |   |     |        |   |   |    |   |   |      |    |   |   |   |   |   |
| Mortgage      loans:                                                                             |   |                               |     |   |   |   |     |        |   |   |    |   |   |      |    |   |   |   |   |   |
| Residential      real estate:                                                                    |   |                               |     |   |   |   |     |        |   |   |    |   |   |      |    |   |   |   |   |   |
| Fixed      rate loans                                                                            |   |                               | 920      |   |   |   | 3,540    |        |   |   | 88,372  |   |   |      | 92,832  |   |   |   | 16.87 | % |
| Variable      loans                                                                              |   |                               | 27,681   |   |   |   | 19,340   |        |   |   | 391     |   |   |      | 47,412  |   |   |   | 8.61 | % |
| Commercial      real estate                                                                      |   |                               | 41,357   |   |   |   | 63,541   |        |   |   | 6,325   |   |   |      | 111,223 |   |   |   | 20.21 | % |
| Construction                                                                                     |   |                               | 4,275    |   |   |   | 262      |        |   |   | -       |   |   |      | 4,537   |   |   |   | 0.82 | % |
| Other      loans:                                                                                |   |                               |     |   |   |   |     |        |   |   |    |   |   |      |    |   |   |   |   |   |
| Commercial                                                                                       |   |                               | 21,029   |   |   |   | 11,396   |        |   |   | 1,091   |   |   |      | 33,516  |   |   |   | 6.09 | % |
| Consumer      and other                                                                          |   |                               | 1,536    |   |   |   | 35,155   |        |   |   | 80,356  |   |   |      | 117,047 |   |   |   | 21.27 | % |
|  Total      loans                                                                           |   |                               | 96,798   |   |   |   | 133,234  |        |   |   | 176,535 |   |   |      | 406,567 |   |   |   | 73.87 | % |
| Total      interest-earning assets                                                               |   | $                                  | 107,843  |   |   | $      | 136,823  |        |   | $      | 305,698 |   |   | $         | 550,364 |   |   |   | 100.00 | % |
|                                                                                             |   |                               |     |   |   |   |     |        |   |   |    |   |   |      |    |   |   |   |   |   |
| Interest-bearing      liabilities:                                                               |   |                               |     |   |   |   |     |        |   |   |    |   |   |      |    |   |   |   |   |   |
| Customer      deposits:                                                                          |   |                               |     |   |   |   |     |        |   |   |    |   |   |      |    |   |   |   |   |   |
| NOW      accounts                                                                                |   | $                                  | 47,978   |   |   | $      | -        |        |   | $      | -       |   |   | $         | 47,978  |   |   |   | 9.32 | % |
| Money      market accounts                                                                       |   |                               | 22,161   |   |   |   | -        |        |   |   | -       |   |   |      | 22,161  |   |   |   | 4.30 | % |
| Regular      savings                                                                             |   |                               | 19,905   |   |   |   | -        |        |   |   | -       |   |   |      | 19,905  |   |   |   | 3.86 | % |
| Time      deposits                                                                               |   |                               | 202,018  |   |   |   | 35,901   |        |   |   | 268     |   |   |      | 238,187 |   |   |   | 46.24 | % |
| Total      customer deposits                                                                     |   |                               | 292,062  |   |   |   | 35,901   |        |   |   | 268     |   |   |      | 328,231 |   |   |   | 63.72 | % |
| Borrowings:                                                                                      |   |                               |     |   |   |   |     |        |   |   |    |   |   |      |    |   |   |   |   |   |
| Short-term      borrowings                                                                       |   |                               | 32,841   |   |   |   | -        |        |   |   | -       |   |   |      | 32,841  |   |   |   | 6.39 | % |
| FHLB      advances and other borrowings                                                          |   |                               | 56,486   |   |   |   | 62,895   |        |   |   | 18,112  |   |   |      | 137,493 |   |   |   | 26.69 | % |
| Junior      subordinated debentures                                                              |   |                               | 6,186    |   |   |   | 10,310   |        |   |   | -       |   |   |      | 16,496  |   |   |   | 3.20 | % |
| Total      borrowings                                                                            |   |                               | 95,513   |   |   |   | 73,205   |        |   |   | 18,112  |   |   |      | 186,830 |   |   |   | 36.28 | % |
| Total      interest-bearing liabilities                                                          |   | $                                  | 387,575  |   |   | $      | 109,106  |        |   | $      | 18,380  |   |   | $         | 515,061 |   |   |   | 100.00 | % |
|                                                                                             |   |                               |     |   |   |   |     |        |   |   |    |   |   |      |    |   |   |   |   |   |
| Interest      sensitivity gap                                                                    |   | $                                  | (279,732 | )      |   | $      | 27,717   |        |   | $      | 287,318 |   |   | $         | 35,303  |   |   |   |   |   |
|                                                                                             |   |                               |     |   |   |   |     |        |   |   |    |   |   |      |    |   |   |   |   |   |
| Cumulative      gap                                                                              |   | $                                  | (279,732 | )      |   | $      | (252,015 | )           |   | $      | 35,303  |   |   | $         | 35,303  |   |   |   |   |   |
|                                                                                             |   |                               |     |   |   |   |     |        |   |   |    |   |   |      |    |   |   |   |   |   |
| Cumulative      gap ratio                                                                        |   |                               | 27.83    | %      |   |   | 49.26    | %           |   |   | 106.85  | %      |   |      | 106.85  | % |   |   |   |   |
|                                                                                             |   |                               |     |   |   |   |     |        |   |   |    |   |   |      |    |   |   |   |   |   |
| Cumulative      gap as a percentage of total assets                                              |   |                               | -46.76   | %      |   |   | -42.12   | %           |   |   | 5.90    | %      |   |      | 5.90    | % |   |   |   |   |
|                                                                                             |   |                               |     |   |   |   |     |        |   |   |    |   |   |      |    |   |   |   |   |   |

| (1)      Includes interest-earning deposits and loans held forsale.                                                                                                       |   |   |   |   |   |   |   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| This      table summarizes the anticipated maturities and repricing of the Company's      interest-earning assets and interest-bearing liabilities at      June 30, 2008. |
|                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| The      Company's internal asset/liability analysis considers regular savings, NOW      and money market accounts core deposits.  Due to this                  |
| consideration,      the Company's internal asset/liability model has these core deposits      designated in      a five year or greater maturity category                 |
| and not      one year or less as the above schedule shows.  Because of this      difference, the Company does not consider its cumualtive gap                   |
| position      to be as liability sensitive through Year 5 as presented in the      schedule above.                                                                   |

----

| Table      14                                                                                    |   |          |      |   |         |   |      |         |   |   |         |   |
|--------------------------------------------------------------------------------------------------|--------|---------------|-----------|--------|--------------|--------|-----------|--------------|--------|--------|--------------|--------|
| Northeast      Bancorp Consolidated                                                              |   |          |      |   |         |   |      |         |   |   |         |   |
| Quarterly      Data (Unaudited)                                                                  |   |          |      |   |         |   |      |         |   |   |         |   |
| For      Year Ended June 30, 2008                                                                |   |          |      |   |         |   |      |         |   |   |         |   |
|                                                                                             |   | 1st      Qtr  |      |   | 2nd      Qtr |   |      | 3rd      Qtr |   |   | 4th      Qtr |   |
|                                                                                             |   | Sept.      30 |      |   | Dec.      31 |   |      | Mar.      31 |   |   | June      30 |   |
|                                                                                             |   | 2007          |      |   | 2007         |   |      | 2008         |   |   | 2008         |   |
| Interest      income                                                                             |   |          |      |   |         |   |      |         |   |   |         |   |
| Interest      on loans                                                                           |   | $             | 7,723,178 |   |         | $      | 7,588,460 |         |   | $      | 7,145,886    |   |   | $ | 6,814,246 |   |
| Interest      & dividends on investments                                                     |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
|   &      available-for-sale securities                                             |   |          | 1,233,709 |   |         |   | 1,484,190 |         |   |   | 1,649,943    |   |   |   | 1,758,062 |   |
| Total      interest and dividend income                                                          |   |          | 8,956,887 |   |         |   | 9,072,650 |         |   |   | 8,795,829    |   |   |   | 8,572,308 |   |
|                                                                                             |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
| Interest      expense                                                                            |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
| Deposits                                                                                         |   |          | 3,414,576 |   |         |   | 3,412,717 |         |   |   | 3,355,439    |   |   |   | 2,907,144 |   |
| FHLB      advances and other borrowings                                                          |   |          | 1,303,559 |   |         |   | 1,415,277 |         |   |   | 1,505,307    |   |   |   | 1,427,580 |   |
| Short-term      borrowings                                                                       |   |          | 372,425   |   |         |   | 402,950   |         |   |   | 264,690      |   |   |   | 204,377 |   |
| Junior      Subordinated Debentures                                                              |   |          | 273,480   |   |         |   | 272,412   |         |   |   | 267,723      |   |   |   | 251,349 |   |
| Total      interest expense                                                                      |   |          | 5,364,040 |   |         |   | 5,503,356 |         |   |   | 5,393,159    |   |   |   | 4,790,450 |   |
|                                                                                             |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
| Net      interest income                                                                         |   |          | 3,592,847 |   |         |   | 3,569,294 |         |   |   | 3,402,670    |   |   |   | 3,781,858 |   |
| Provision      for loan losses                                                                   |   |          | 190,283   |   |         |   | 179,653   |         |   |   | 287,625      |   |   |   | 178,923 |   |
|                                                                                             |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
| Net      interest income after provision for loan losses                                         |   |          | 3,402,564 |   |         |   | 3,389,641 |         |   |   | 3,115,045    |   |   |   | 3,602,935 |   |
|                                                                                             |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
| Securities      transactions                                                                     |   |          | (5,937    | )      |         |   | (1,799    | )            |   |   | 267,147      |   |   |   | 33,690 |   |
| Other      operating income                                                                      |   |          | 1,995,311 |   |         |   | 2,398,684 |         |   |   | 3,373,686    |   |   |   | 2,742,442 |   |
| Other      operating expense                                                                     |   |          | 4,841,604 |   |         |   | 5,280,850 |         |   |   | 5,846,368    |   |   |   | 5,885,632 |   |
|                                                                                             |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
| Income      before income taxes                                                                  |   |          | 550,334   |   |         |   | 505,676   |         |   |   | 909,510      |   |   |   | 493,435 |   |
| Income      tax expense                                                                          |   |          | 119,769   |   |         |   | 103,248   |         |   |   | 237,341      |   |   |   | 67,308 |   |
| Net      income                                                                                  |   | $             | 430,565   |   |         | $      | 402,428   |         |   | $      | 672,169      |   |   | $ | 426,127 |   |
|                                                                                             |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
| Earnings      per share:                                                                         |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
| Basic                                                                                            |   | $             | 0.18      |   |         | $      | 0.17      |         |   | $      | 0.29         |   |   | $ | 0.18 |   |
| Diluted                                                                                          |   | $             | 0.18      |   |         | $      | 0.17      |         |   | $      | 0.29         |   |   | $ | 0.18 |   |
|                                                                                             |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
|                                                                                             |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
| Northeast      Bancorp Consolidated                                                              |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
| Quarterly      Data (Unaudited)                                                                  |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
| For      Year Ended June 30, 2007                                                                |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
|                                                                                             |   | 1st      Qtr  |      |   | 2nd      Qtr |   |      | 3rd      Qtr |   |   | 4th      Qtr |   |
|                                                                                             |   | Sept.      30 |      |   | Dec.      31 |   |      | Mar.      31 |   |   | June      30 |   |
|                                                                                             |   | 2006          |      |   | 2006         |   |      | 2007         |   |   | 2007         |   |
| Interest      income                                                                             |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
| Interest      on loans                                                                           |   | $             | 7,942,105 |   |         | $      | 7,951,759 |         |   | $      | 7,779,765    |   |   | $ | 7,692,918 |   |
|                                                                                             |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
| Interest      & dividends on investments  & available-for-sale      securities |   |          | 1,079,884 |   |         |   | 1,084,560 |         |   |   | 1,042,775    |   |   |   | 1,108,589 |   |
| Total      interest and dividend income                                                          |   |          | 9,021,989 |   |         |   | 9,036,319 |         |   |   | 8,822,540    |   |   |   | 8,801,507 |   |
|                                                                                             |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
| Interest      expense                                                                            |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
| Deposits                                                                                         |   |          | 3,350,654 |   |         |   | 3,352,163 |         |   |   | 3,365,204    |   |   |   | 3,422,152 |   |
| FHLB      advances and other borrowings                                                          |   |          | 970,138   |   |         |   | 967,609   |         |   |   | 993,900      |   |   |   | 1,089,704 |   |
| Short-term      borrowings                                                                       |   |          | 307,829   |   |         |   | 437,547   |         |   |   | 398,246      |   |   |   | 361,314 |   |
| Junior      Subordinated Debentures                                                              |   |          | 277,991   |   |         |   | 276,883   |         |   |   | 270,912      |   |   |   | 254,752 |   |
| Total      interest expense                                                                      |   |          | 4,906,612 |   |         |   | 5,034,202 |         |   |   | 5,028,262    |   |   |   | 5,127,922 |   |
|                                                                                             |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
| Net      interest income                                                                         |   |          | 4,115,377 |   |         |   | 4,002,117 |         |   |   | 3,794,278    |   |   |   | 3,673,585 |   |
| Provision      for loan losses                                                                   |   |          | 300,786   |   |         |   | 375,546   |         |   |   | 200,043      |   |   |   | 112,783 |   |
|                                                                                             |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
| Net      interest income after provision for loan losses                                         |   |          | 3,814,591 |   |         |   | 3,626,571 |         |   |   | 3,594,235    |   |   |   | 3,560,802 |   |
|                                                                                             |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
| Securities      transactions                                                                     |   |          | 4,386     |   |         |   | 17,878    |         |   |   | 8,443        |   |   |   | 11,642 |   |
| Other      operating income                                                                      |   |          | 1,458,042 |   |         |   | 1,869,280 |         |   |   | 2,379,096    |   |   |   | 2,196,060 |   |
| Other      operating expense                                                                     |   |          | 4,669,678 |   |         |   | 4,964,155 |         |   |   | 5,265,250    |   |   |   | 5,176,103 |   |
|                                                                                             |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
| Income      before income taxes                                                                  |   |          | 607,341   |   |         |   | 549,574   |         |   |   | 716,524      |   |   |   | 592,401 |   |
| Income      tax expense                                                                          |   |          | 152,674   |   |         |   | 132,218   |         |   |   | 191,557      |   |   |   | 102,714 |   |
| Net      income                                                                                  |   | $             | 454,667   |   |         | $      | 417,356   |         |   | $      | 524,967      |   |   | $ | 489,687 |   |
|                                                                                             |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
| Earnings      per share:                                                                         |   |          |      |   |         |   |      |         |   |   |         |   |   |   |   |   |
| Basic                                                                                            |   | $             | 0.19      |   |         | $      | 0.17      |         |   | $      | 0.21         |   |   | $ | 0.20 |   |
| Diluted                                                                                          |   | $             | 0.18      |   |         | $      | 0.17      |         |   | $      | 0.21         |   |   | $ | 0.20 |   |

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| Item 9.   | Changes in and      Disagreements with Accountants on Accounting and Financial      Disclosure                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      | Not      applicable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Item 9.a. | Controls and      Procedures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|      | The      Corporation carried out an evaluation, under the supervision and with the      participation of the Corporation’s management, including the Corporation’s      Chief Executive Officer and Chief Financial Officer, of the effectiveness      of its disclosure controls and procedures, as defined in Exchange Act      Rules 13a-15(e) and 15d-15(e).  Based upon the evaluation, the      Corporation’s Chief Executive Officer and Chief Financial Officer      concluded that as of June 30, 2008, the Corporation’s disclosure controls      and procedures are effective.  Disclosure controls and      procedures are controls and procedures that are designed to ensure that      information required to be disclosed in the Corporation’s reports filed or      submitted under the Exchange Act is recorded, processed, summarized and      reported within the time periods specified in the Securities and Exchange      Commission’s rules and forms. An      evaluation was performed under the supervision and with the participation      of the Company's management, including its Chief Executive Officer and      Chief Financial Officer, of the effectiveness of the design and operation      of our internal controls and procedures over financial reporting (as      defined in Rule 13a-15(e) of the Exchange Act) as of the end of the period      covered by this annual report. Management      is responsible for establishing and maintaining adequate internal controls      over financial reporting.  The standard measures adopted by      management in making its evaluation are the measures in Interest Control - Integrated Framework      published by the Committeee of Sponsoring Organizations of the Treadway      Commission.  We do not expect that our disclosure controls and      procedures will prevent all error and all fraud.  A control      system, no matter how well designed and operated, can provide only      reasonable, not absolute, assurance that the control system's objective      will be met.  Further, the design of a control system must      reflect the fact that there are resource constraints, and the benefits of      controls must be considered relative to their costs.  Because of      the inherent limitations in all control systems, no evaluation of controls      can provide absolute assurance that all control issues, errors, and      instances of fraud, if any, within the Company have been or will be      detected.  The inherent limitations include, among other things,      the realities that judgments in decision-making can be faulty, and that      breakdowns can occur because of simple error or      mistake.  Controls and procedures also can be circumvented by      the individual acts of some persons, by collusion of two or more people,      or by management or employee override of the controls and      procedures.  The design of any system of controls and procedures      is based in part upon certain assumptions about the likelihood of future      events, and there can be no assurance that any design will succeed in      achieving its stated goals under all potential future      conditions.  Over time, controls and procedures may become      inadequate because of changes in conditions or deterioration in the degree      of compliance with its policies or procedures.  Because of the      inherent limitation in a cost-effective control system, misstatements due      to error or fraud may occur and not be detected. Based      on their evaluation of disclosure controls and procedures, our Chief      Executive Officer and Chief Financial Officer concluded, subject to the      limitations described above, that our internal controls and procedures      over financial reporting as of the end of the period covered by this      report were effective and that there were no material      weaknesses. There      have been no significant changes in our internal controls, or in other      factors that could significantly affect our internal controls, subsequent      to the date the Chief Executive Officer and Chief Financial Officer      completed their evaluation, including any corrective actions with regard      to significant deficiencies or material weaknesses. This      annual report does not include an attestation report of the Company’s      registered public accounting firm regarding internal controls over      financial reporting.  Management’s report was not subject to      attestation by the Company’s registered pubic accounting firm pursuant to      temporary rules of the Securities Exchange Commission that permit the      Company to provide only management report in this annual      report.  |
| Item 9.b. | Other      Information.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|      | None.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

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| Item 10. | Directors and      Executive Officers of the Registrant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|     | The      information required by Item 10 of Form 10-K with respect to our directors      and executive officers is incorporated by reference from the information      contained in the section captioned "Election of Directors" in the      Company's definitive Proxy Statement for the 2008 Annual Meeting of      Stockholders, which will be filed with the Securities and Exchange      Commission no later than 120 days after the close of the Company's 2008      fiscal year (the "2008 Proxy Statement").  Certain information      with respect to executive officers is included in Part I, Item 4 of this      report.  The information required by Item 10 of Form 10-K with      respect to compliance with Section 16(a) of the Securities Exchange Act of      1934 is incorporated by reference from the information contained in the      section captioned "Section 16(a) Beneficial Ownership Reporting      Compliance" in the 2008 Proxy Statement.  Information regarding      the information required by Item 406 of Regulation S-K is incorporated      herein by reference from the information contained in the section      captioned “Corporate Governance – Code of Ethics” in the 2008 Proxy      Statement.  The information required by Item 10 of Form 10-K      with respect to our audit committee is incorporated by reference from the      information contained in the section captioned "Corporate Goverence Board      Committee and Membership and Meetings – Audit Committee” in the Company's      2008 Proxy Statement. |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Item 11. | Executive      Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|     | The      information required by Item 11 of Form 10-K is incorporated by reference      from the information contained in the sections captioned "Election of      Directors - Compensation of Directors," “Compensation of Executive      Officers”, "Compensation Discussion and Analysis”, and "Compensation      Committee Interlocks and Insider Participation" in the 2008 Proxy      Statement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Item 12. | Security Ownership of      Certain Beneficial Owners and Management and Related      Stockholders                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|     | The      information required by Item 12 of Form 10-K is incorporated by reference      from the information contained in the section captioned "Security Ownership of      Management and Certain Beneficial Owners" in the 2008 Proxy      Statement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|     | The      following table provided information about the Company's Common Stock that      may be issued upon the exercise of stock options under all of the      registrant's equity compensation plans in effect as of June 30,      2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

|                                                                                                                           | (a)                                                                                                                                        | (b)                                                                              | (c)                                                                                                                                                                                                                                                                                 |
|--------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|     Plan      category               |    Number      of securities to beissued      upon exercise of         outstanding options    |    Weighted-averageexercise      price ofoutstanding      options | Number      of securitiesremaining      available forfuture      issuance underequity      compensation plan(excluding      securitiesreferenced      in the first              column (a))         |
| Equity      compensationPlan      approved bySecurity      holders (1)                                                         |   36,000                                                                                                                         |   $ 10.09                                                         |   189,500                                                                                                                                                                                                                                                                 |
|                                                                                                                           |                                                                                                                                       |                                                                             |                                                                                                                                                                                                                                                                                |
| Equity      compensationPlan      not approved bySecurity      holders                                                         |         0                                                                                          |   $  0.00                                                    |         0                                                                                                                                                                                                                                   |

| (1)      | Includes      stock options granted or available under  stockholder approved      Stock Option Plans in 2001, 1999, 1992 and 1989 (the "Stock Option      Plans").                                                                                                                                |
|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|     |                                                                                                                                                                                                                                                                                                        |
|     | Our      Stock Option Plans provide for a proportionate adjustment to the number of      shares reserved for issuance in the event of any stock dividend, stock      split, combination, recapitalization, or similar event.                                                                                |
|     |                                                                                                                                                                                                                                                                                                        |
| Item 13. | Certain Relationships      and Related Transactions                                                                                                                                                                                                                                                         |
|     | The      information required by Item 13 of Form 10-K is incorporated by reference      from the information contained in the section captioned "Related Party      Transactions" and “Corporate Governance – Director Qualifications and      Independence” in the 2008 Proxy Statement. |
|     |                                                                                                                                                                                                                                                                                                        |
| Item 14. | Principal Accountant      Fees and Services                                                                                                                                                                                                                                                                 |
|     | The      information required by Item 14 of Form 10-K is incorporated herein by      reference from the information contained in the section "Relationship with      Independent Accountants" in the 2008 Proxy  Statement.                                                                                 |

----

| Item 15.                                            | Exhibits and Financial      Statement Schedules                                                                                                                                                                                                                                                               |
|-----------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         (a) | List of Financial      Statements Filed as Part of This Report                                                                                                                                                                                                                                                |
|                                                | The      following financial statements are submitted herewith in response to Part      II Item 8:                                                                                                                                                                                                            |
|                                                | Consolidated      Balance Sheets as of June 30, 2008 and 2007                                                                                                                                                                                                                                                 |
|                                                | Consolidated      Statements of Income for the years ended June 30, 2008, 2007 and      2006                                                                                                                                                                                                                  |
|                                                | Consolidated      Statements of Changes in Stockholders' Equity for the years ended June 30,      2008, 2007 and 2006                                                                                                                                                                                         |
|                                                | Consolidated      Statements of Cash Flows for the years ended June 30, 2008, 2007 and      2006                                                                                                                                                                                                              |
|         (b) | Exhibits                                                                                                                                                                                                                                                                                                      |
|                                                | The      exhibits listed below are filed herewith or are incorporated herein by      reference to other filings.                                                                                                                                                                                              |
| 3.1                                                 | Conformed      Articles of Incorporation of Northeast Bancorp, incorporated by reference      to Exhibit 3.1 Northeast Bancorp's Annual Report on Form 10-K for the year      ended June 30, 2007.                                                                                                            |
| 3.2                                                 | Bylaws      of Northeast Bancorp, incorporated by reference to Exhibit 3.2 Northeast      Bancorp's Annual Report on Form 10-K for the year ended June 30,      2007.                                                                                                                                         |
| 4.1                                                 | Form      of Indenture with respect to Northeast Bancorp's Junior Subordinated      Debentures, incorporated by reference to Exhibit 4.1 to Northeast      Bancorp's Registration Statement on Form S-2 (No. 333-88853-01), filed      with the Securities and Exchange Commission on October 12,      1999.  |
| 4.2                                                 | Form      of Junior Subordinated Debentures (included in Exhibit 4.1), incorporated      by reference to Exhibit 4.2 to Northeast Bancorp's Registration Statement      of Form S-2 (No. 333-88853-01), filed with the Securities and Exchange      Commission on October 12, 1999.                           |
| 4.3                                                 | Trust      Agreement of NBN Capital Trust (including Certificate of Trust of NBN      Capital Trust), incorporated by reference to Exhibit 4.3 to Northeast      Bancorp's Registration Statement on Form S-2 (No. 333-88853-01), filed      with the Securities and Exchange Commission October 12,    1999. |
| 4.4                                                 | Form      of Amended and Restated Trust Agreement of NBN Capital Trust, incorporated      by reference to Exhibit 4.4 to Northeast Bancorp's Registration Statement      on Form S-2 (No. 333-88853-01), filed with the Securities and Exchange      Commission on October 12, 1999.                          |
| 4.5                                                 | Form      of Preferred Securities of NBN Capital Trust (included in Exhibit 4.4),      incorporated by reference to Exhibit 4.5 to Northeast Bancorp's      Registration Statement on Form S-2 (No. 333-88853-01), filed with the      Securities and Exchange Commission on October 12, 1999.                |
| 4.6                                                 | Form      of Guarantee Agreement, incorporated by reference to Exhibit 4.6 to      Northeast Bancorp's Registration Statement on Form S-2 (No. 333-88853-01),      filed with the Securities and Exchange Commission on October 12,      1999.                                                                |
| 10.1                                                | 1987      Stock Option Plan of Northeast Bancorp (formerly known as Bethel Bancorp),      incorporated by reference to Bethel Bancorp's Registration Statement on      Form S-1 (No. 33-12815), filed with the Securities and Exchange      Commission.                                                       |
| 10.2                                                | 1989      Stock Option Plan of Northeast Bancorp (formerly known as Bethel Bancorp)      incorporated by reference to Exhibit 10.2 Northeast Bancorp's Annual      Report on Form 10-K for the year ended June 30, 2007.                                                                                      |
| 10.3                                                | 1992      Stock Option Plan of Northeast Bancorp (formerly known as Bethel Bancorp)      incorporated by reference to Exhibit 10.3 Northeast Bancorp's Annual      Report on Form 10-K for the year ended June 30, 2007.                                                                                      |
| 10.4                                                | 1999      Stock Option Plan of Northeast Bancorp, incorporated by reference to      Exhibit 10.4 Northeast Bancorp's Annual Report on Form 10-K for the year      ended June 30, 2007.                                                                                                                        |
| 10.5                                                | 2001      Stock Option Plan of Northeast Bancorp incorporated by reference to      Northeast Bancorp's Registration Statement on Form S-8, filed with the      Securities and Exchange Commission on March 31, 2002.                                                                                          |
| 11                                                  | Statement      regarding computation of per share earnings is submitted herewith as      Exhibit 11.                                                                                                                                                                                                          |
| 21                                                  | A      list of subsidiaries of Northeast Bancorp.                                                                                                                                                                                                                                                             |
| 23.1                                                | The      Consent of Shatswell, MacLeod & Company,P.C.                                                                                                                                                                                                                                                     |
| 23.2                                                | The      Consent of Baker Newman & Noyes, Limited Liability      Company.                                                                                                                                                                                                                                 |
| 31.1                                                | Certification      of the Chief Executive Officer pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002 (Rule 13a-14(a)).                                                                                                                                                                            |
| 31.2                                                | Certification      of the Chief Financial Officer pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002 (Rule 13a-14(a)).                                                                                                                                                                            |
| 32.1                                                | Certificate      of the Chief Executive Officer and Chief Financial Officer Pursuant to 18      U.S.C. Section 1350,  as Adopted Pursuant to Section 906 of the      Sarbanes-Oxley Act of 2002 (Rule 13a-14(b)). **                                                                                |
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|                                                | With      the exception of the information expressly incorporated herein by      reference, the Company's 2008 Proxy      Statement for the 2008 Annual Meeting of Shareholders is not to be deemed      filed as part of this Annual Report on Form10-K                                                      |

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| Date:  September      19, 2008 | By:  /s/      James D. Delamater |
|------------------------------------------|--------------------------------------------|
|                                     | James      D. Delamater, President         |

|           Name                |           Title          |           Date          |
|------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------|
| /s/ Conrad L.      AyotteConrad      L. Ayotte                                                                               | Director                                                                                                                | September      19, 2008                                                                                                |
| /s/ John B.      BouchardJohn      B. Bouchard                                                                               | Director                                                                                                                | September      19, 2008                                                                                                |
| /s/ James P.      DayJames      P. Day                                                                                       | Director                                                                                                                | September      19, 2008                                                                                                |
| /s/ James D.      DelamaterJames      D. Delamater                                                                           | Director,President      and ChiefExecutive      Officer(Principal      Executive Officer)                               | September      19, 2008                                                                                                |
| /s/ Ronald J.      GoguenRonald      J. Goguen                                                                               | Director                                                                                                                | September      19, 2008                                                                                                |
| /s/ Philip C.      JacksonPhilip      C. Jackson                                                                             | Director                                                                                                                | September      19, 2008                                                                                                |
| /s/ Judith W.      KelleyJudith      W. Kelley                                                                               | Chairman      of the Board                                                                                         | September      19, 2008                                                                                                |
| /s/ Pender J.      LazenbyPender      J. Lazenby                                                                             | Director                                                                                                                | September      19, 2008                                                                                                |
| /s/ John C.      OrestisJohn      C. Orestis                                                                                 | Director                                                                                                                | September      19, 2008                                                                                                |
| /s/ John      RosmarinJohn      Rosmarin                                                                                     | Vice-Chairman      of the Board                                                                                         | September      19, 2008                                                                                                |
| /s/ John      SchiaviJohn      Schiavi                                                                                       | Director                                                                                                                | September      19, 2008                                                                                                |
| /s/ Stephen W.      WightStephen      W. Wight                                                                               | Director                                                                                                                | September      19, 2008                                                                                                |
| /s/ Robert S.      JohnsonRobert      S. Johnson                                                                             | Chief      Financial Officer(Principal      Financial andAccounting      Officer)                                       | September      19, 2008                                                                                                |

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| ExhibitNumber | Exhibit                                                                                                                                                                                                                                                                                   |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1           | Conformed      Articles of Incorporation of Northeast Bancorp, incorporated by reference      to Exhibit 3.1 Northeast Bancorp's Annual Report on Form 10-K for the year      ended June 30, 2007.                                                                                        |
| 3.2           | Bylaws      of Northeast Bancorp, incorporated by reference to Exhibit 3.2 Northeast      Bancorp's Annual Report on Form 10-K for the year ended June 30,      2007.                                                                                                                     |
| 4.1           | Form      of Indenture with respect to Northeast Bancorp's Junior Subordinated      Debentures, incorporated by reference to Exhibit 4.1 to Northeast      Bancorp's Registration Statement on Form S-2 (No. 333-88853-01), filed      with the Securities and Exchange Commission.       |
| 4.2           | Form      of Junior Subordinated Debentures (included in Exhibit 4.1), incorporated      by reference to Exhibit 4.2 to Northeast Bancorp's Registration Statement      of Form S-2 (No. 333-88853-01), filed with the Securities and Exchange      Commission.                           |
| 4.3           | Trust      Agreement of NBN Capital Trust (including Certificate of Trust of NBN      Capital Trust), incorporated by reference to Exhibit 4.3 to Northeast      Bancorp's Registration Statement on Form S-2 (No. 333-88853-01), filed      with the Securities and Exchange Commission. |
| 4.4           | Form      of Amended and Restated Trust Agreement of NBN Capital Trust, incorporated      by reference to Exhibit 4.4 to Northeast Bancorp's Registration Statement      on Form S-2 (No. 333-88853-01), filed with the Securities and Exchange      Commission.                          |
| 4.5           | Form      of Preferred Securities of NBN Capital Trust (included in Exhibit 4.4),      incorporated by reference to Exhibit 4.5 to Northeast Bancorp's      Registration Statement on Form S-2 (No. 333-88853-01), filed with the      Securities and Exchange Commission.                |
| 4.6           | Form      of Guarantee Agreement, incorporated by reference to Exhibit 4.6 to      Northeast Bancorp's Registration Statement on Form S-2 (No. 333-88853-01),      filed with the Securities and Exchange Commission.                                                                     |
| 10.1          | 1987      Stock Option Plan of Northeast Bancorp (formerly known as Bethel Bancorp),      incorporated by reference to Bethel Bancorp's Registration Statement on      Form S-1 (No. 33-12815), filed with the Securities and Exchange      Commission.                                   |
| 10.2          | 1989      Stock Option Plan of Northeast Bancorp (formerly known as Bethel Bancorp)      incorporated by reference to Exhibit 10.2 Northeast Bancorp's Annual      Report on Form 10-K for the year ended June 30, 2007.                                                                  |
| 10.3          | 1992      Stock Option Plan of Northeast Bancorp (formerly known as Bethel Bancorp)      incorporated by reference to Exhibit 10.3 Northeast Bancorp's Annual      Report on Form 10-K for the year ended June 30, 2007.                                                                  |
| 10.4          | 1999      Stock Option Plan of Northeast Bancorp, incorporated by reference to      Exhibit 10.4 Northeast      Bancorp's Annual Report on Form 10-K for the year ended June 30,      2007.                                                                                          |
| 10.5          | 2001      Stock Option Plan of Northeast Bancorp incorporated by reference to      Northeast Bancorp's Registration Statement on Form S-8, filed with the      Securities and Exchange Commission on March 31, 2002.                                                                      |
| 11            | Statement      regarding computation of per share earnings is submitted herewith as      Exhibit 11.                                                                                                                                                                                      |
| 21            | A      list of subsidiaries of Northeast Bancorp.                                                                                                                                                                                                                                         |
| 23.1          | The      Consent of Shatswell, MacLeod & Company, P.C.                                                                                                                                                                                                                                |
| 23.2          | The      Consent of Baker Newman & Noyes, Limited Liability      Company.                                                                                                                                                                                                             |
| 31.1          | Certification      of the Chief Executive Officer pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002 (Rule 13a-14(a)).                                                                                                                                                        |
| 31.2          | Certification      of the Chief Financial Officer pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002 (Rule 13a-14(a)).                                                                                                                                                        |
| 32.1          | Certificate      of the Chief Executive Officer and Chief Financial Officer Pursuant to 18      U.S.C. Section 1350,  as Adopted Pursuant to Section 906 of the      Sarbanes-Oxley Act of 2002 (Rule13a-14(b)).                                                                |

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