**FORM        10-K**

**SECURITIES        AND EXCHANGE COMMISSION**

**NORTHEAST        BANCORP**

| 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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**DOCUMENTS        INCORPORATED BY REFERENCE**

| **Document**                                                                      | **Form                  10-K Reference Location** |
|-----------------------------------------------------------------------------------|---------------------------------------------------|
| Proxy                  Statement for the 2007 Annual Meeting of Shareholders | III                                               |

**This        Annual Report on Form 10-K contains certain forward-looking statements within        the meaning of  Section 27A of the Securities Exchange Act of 1933 and        Section 21E of the Securities Act of 1934 and is subject to risks,        uncertainties, and other factors which could cause actual results to differ        materially from those expressed or implied by such forward-looking        statements.  See "Item 1. Business -Forward Looking Statements and        Risk Factors."**

**PART        I**

**Item        1.  Business**

**Overview        and History**

**Strategy**

| ·   | employees                  with local decision-making                  authority; |
|--------------------|-----------------------------------------------------------------------------------|

| ·   | 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's                  needs. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Market        Area**

**Market        for Services**

**Competition**

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**Lending        Activities**

**General**

**Residential        Lending**

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**Commercial          Real Estate Lending**

**Commercial        Lending**

**Consumer        Loans**

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**Construction        Loans**

**Loan        Origination and Processing**

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**Other        Subsidiaries**

**Employees**

**SUPERVISION        AND REGULATION**

**Bank        Holding Company Regulation**

*General*
**.**

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*Financial        Modernization*

| ·   | 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. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Banking        Acquisitions*

*Interstate        Banking and Branching*

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*Source        of Strength; Safety and Soundness*
***.***

**Bank        Regulation**

*General*

*Transactions        with Affiliates.*
* *

*Loans        to Insiders*

*Bank        Subsidiaries' Activities*
*.*

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**Dividend        Restrictions**

**Capital        Adequacy Guidelines**

*Minimum        Capital Requirements*
***.***

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*Classification        of Banking Institutions*

|                                            | 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%                                                                 |

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*Prompt        Corrective Regulatory Action.*
* *

**Enforcement        Policies and Actions**

**.**

**Community        Reinvestment Act**

**FDIC        Insurance Premiums**

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**Gramm-Leach-Bliley        Act**

**Anti-Money        Laundering and Anti-Terrorism Legislation**

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**Sarbanes-Oxley        Act**

| ·   | 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 and                  informants; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 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 other                  violations. |
|--------------------|--------------------------------------------------------------------------------------|

**Monetary        Policy and Economic Control**

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**Industry        Restructuring**

**STATISTICAL        DISCLOSURE**

**FORWARD-LOOKING        STATEMENTS AND RISK FACTORS**

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| 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 qualified                  personnel;                                                                                                                                                                                              |
| 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.                                                                                                                                                                                                                                                                                        |

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**ITEM        1.a. Risk Factors**

**Impairment        Risk**

**Competition**

**Government        Regulation and Supervision**

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**Internal        Controls and Procedures**

**Litigation**

**Attracting        and Retaining Skilled Personnel**

**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                                                                                                                                  | Lease                  (5)  |
| 350                  Minot Avenue, Auburn*                                                                                                                              | Lease                  (5)  |
| 235                  Western Avenue, Augusta*                                                                                                                           | Fee                  Simple |
| 11                  Main Street, Bethel*                                                                                                                                | Fee                  Simple |
| 346                  Main Street, Jackman                                                                                                                               | Lease                  (5)  |
| 28                  Main Street, Livermore Falls                                                                                                                        | Lease                  (7)  |
| 89                  Main Street, Mexico                                                                                                                                 | Lease                  (5)  |
| 2568                  Main Street, Rangeley                                                                                                                             | Lease                  (5)  |
| 423                  U. S. Route 1, Scarborough                                                                                                                         | Lease                  (6)  |
| 235                  Main Street, South Paris*                                                                                                                          | Fee                  Simple |
| 10                  Snell Hill Road, Turner                                                                                                                             | 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 one year and automatically renews in September each                  year.                                                           |
| (6)                  Lease term is three years and expires July 31, 2010.                                                                                               |
| (7)                  Lease term is eight months and expires December 31,                  2007.                                                                         |

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**Item        3.  Legal Proceedings**

**Item        4.  Submission of Matters to a Vote of Security        Holders**

**Executive        Officers of the Registrant**

| Name                                | Age | Position                  with Company and/or Bank              |
|-------------------------------------|-----|-----------------------------------------------------------------|
| James                  D. Delamater | 56  | President                  and Chief Executive Officer (1)      |
| Philip                  C. Jackson  | 63  | Senior                  Vice President of Bank Trust Operations |
| Pender                  J. Lazenby  | 57  | Chief                  Risk Officer                             |
| Marcel                  Blais       | 48  | Chief                  Operating Officer                        |
| Robert                  S. Johnson  | 55  | Chief                  Financial Officer (1)                    |
| Suzanne                  Carney     | 40  | Clerk                                                           |

**James        D. Delamater**

**Philip        C. Jackson**

**Marcel        Blais**

**Robert        S. Johnson **

**Pender        J. Lazenby**

**Suzanne        Carney**

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**PART        II**

**Item        5.  Market for Registrant's Common Equity, Related Stockholder        Matters and Issuer Purchase of Equity Securities**

| 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                    |

| 2005                  – 2006 | High  | Low   | Div                  Pd |
|------------------------------------|-------|-------|-------------------------|
| Jul                  1- Sep 30     | 22.50 | 19.85 | .090                    |
| Oct                  1 - Dec 31    | 24.00 | 21.66 | .090                    |
| Jan                  1 - Mar 31    | 24.50 | 20.80 | .090                    |
| Apr                  1 - Jun 30    | 22.10 | 20.76 | .090                    |

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|  **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                                                                                                                                                                                                                                                                                                                     | - | - | - | 200,000 |
| May                  1 – May 31                                                                                                                                                                                                                                                                                                                       | - | - | - | 200,000 |
| Jun.                  1 – Jun. 30                                                                                                                                                                                                                                                                                                                     | 3,800 | 17.88 | 3,800 | 196,200 |
| (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,                  2007, unless extended. |

| **Item                    6. Selected Financial Data**                                                                                                                                 |   |                                                                |    |   |   |    |   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------|---------|--------|--------|---------|--------|--------|
|                                                                                                                                                                                   |   | At                    or for the Year                               |
|                                                                                                                                                                                   |   | Ended                    June 30,                                   |
|                                                                                                                                                                                   |   | 2007                                                                |    | 2006   |   | 2005    |   | 2004   |   | 2003 |
|                                                                                                                                                                                   |   | (Dollars                    in thousands except for Per Share Data) |
| Selected                    operations data:                                                                                                                                           |   |                                                                |    |   |   |    |   |   |   |   |
| Interest                    income                                                                                                                                                     |   | $                                                                   | 35,682  |   | $      | 35,456  |   | $      | 32,674 |   | $ | 28,124 |   | $ | 29,026 |
| Interest                    expense                                                                                                                                                    |   |                                                                | 20,097  |   |   | 16,761  |   |   | 13,967 |   |   | 12,079 |   |   | 13,769 |
|                                                                                                                                                                                   |   |                                                                |    |   |   |    |   |   |   |   |   |   |   |   |   |
| Net                    interest income                                                                                                                                                 |   |                                                                | 15,585  |   |   | 18,695  |   |   | 18,707 |   |   | 16,045 |   |   | 15,257 |
|                                                                                                                                                                                   |   |                                                                |    |   |   |    |   |   |   |   |   |   |   |   |   |
| Provision                    for loan losses                                                                                                                                           |   |                                                                | 989     |   |   | 1,226   |   |   | 1,302 |   |   | 962 |   |   | 1,091 |
| Other                    operating income (1)                                                                                                                                          |   |                                                                | 7,903   |   |   | 6,578   |   |   | 5,083 |   |   | 4,670 |   |   | 4,174 |
| Net                    securities gains                                                                                                                                                |   |                                                                | 42      |   |   | 17      |   |   | 68 |   |   | 201 |   |   | 922 |
| Other                    operating expenses (2)                                                                                                                                        |   |                                                                | 20,075  |   |   | 18,209  |   |   | 16,684 |   |   | 14,799 |   |   | 13,530 |
|                                                                                                                                                                                   |   |                                                                |    |   |   |    |   |   |   |   |   |   |   |   |   |
| Income                    before income taxes                                                                                                                                          |   |                                                                | 2,466   |   |   | 5,855   |   |   | 5,872 |   |   | 5,155 |   |   | 5,732 |
| Income                    tax expense                                                                                                                                                  |   |                                                                | 579     |   |   | 1,851   |   |   | 1,853 |   |   | 1,643 |   |   | 1,877 |
|                                                                                                                                                                                   |   |                                                                |    |   |   |    |   |   |   |   |   |   |   |   |   |
| Net                    income                                                                                                                                                          |   | $                                                                   | 1,887   |   | $      | 4,004   |   | $      | 4,019 |   | $ | 3,512 |   | $ | 3,855 |
|                                                                                                                                                                                   |   |                                                                |    |   |   |    |   |   |   |   |   |   |   |   |   |
| Consolidated                    per share data:                                                                                                                                        |   |                                                                |    |   |   |    |   |   |   |   |   |   |   |   |   |
| Net                    income:                                                                                                                                                         |   |                                                                |    |   |   |    |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                                                                  |   | $                                                                   | 0.77    |   | $      | 1.61    |   | $      | 1.60 |   | $ | 1.38 |   | $ | 1.46 |
| Diluted                                                                                                                                                                                |   | $                                                                   | 0.76    |   | $      | 1.59    |   | $      | 1.57 |   | $ | 1.35 |   | $ | 1.44 |
| Cash                    dividends                                                                                                                                                      |   | $                                                                   | 0.36    |   | $      | 0.36    |   | $      | 0.36 |   | $ | 0.35 |   | $ | 0.32 |
| Selected                    balance sheet data:                                                                                                                                        |   |                                                                |    |   |   |    |   |   |   |   |   |   |   |   |   |
| Total                    assets                                                                                                                                                        |   | $                                                                   | 556,801 |   | $      | 562,918 |   | $      | 575,900 |   | $ | 538,754 |   | $ | 467,684 |
| Loans                    receivable                                                                                                                                                    |   |                                                                | 425,571 |   |   | 435,663 |   |   | 461,052 |   |   | 432,594 |   |   | 378,987 |
| Deposits                                                                                                                                                                               |   |                                                                | 364,554 |   |   | 395,293 |   |   | 396,219 |   |   | 377,820 |   |   | 318,743 |
| Borrowings                                                                                                                                                                             |   |                                                                | 147,564 |   |   | 124,860 |   |   | 136,293 |   |   | 121,443 |   |   | 109,871 |
| Total                    stockholders' equity                                                                                                                                          |   |                                                                | 40,850  |   |   | 39,096  |   |   | 39,870 |   |   | 36,453 |   |   | 36,499 |
| Other                    ratios:                                                                                                                                                       |   |                                                                |    |   |   |    |   |   |   |   |   |   |   |   |   |
| Return                    on average assets                                                                                                                                            |   |                                                                | 0.34%   |   |   | 0.70%   |   |   | 0.71% |   |   | 0.71% |   |   | 0.86% |
| Return                    on average equity                                                                                                                                            |   |                                                                | 4.59%   |   |   | 9.95%   |   |   | 10.39% |   |   | 9.50% |   |   | 10.58% |
| Average                    equity to average total assets                                                                                                                              |   |                                                                | 7.37%   |   |   | 7.07%   |   |   | 6.86% |   |   | 7.51% |   |   | 8.11% |
| Common                    dividend payout ratio                                                                                                                                        |   |                                                                | 46.77%  |   |   | 22.40%  |   |   | 22.65% |   |   | 25.93% |   |   | 22.22% |
|                                                                                                                                                                                   |   |                                                                |    |   |   |    |   |   |   |   |   |   |   |   |   |
| (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.                                            |

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**Item          7.   Management's Discussion and Analysis of Results of          Operations and Financial Condition**

**A          NOTE ABOUT FORWARD LOOKING STATEMENTS**

**CRITICAL          ACCOUNTING POLICIES**

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**Allowance          for Loan Losses**

**GENERAL**

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**EXECUTIVE          SUMMARY**

| ·   | Four                    insurance agencies were acquired in twelve months ended June                    30,                    2007. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------|

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

| ·   | Commercial                    real estate loans were sold to the secondary market, increasing                    gain on                    sale income by $428,000. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Net                    interest margins decreased to 299 basis points compared to 349                    basis                    points in fiscal 2006 and, combined with a decrease in total                    interest                    earning assets, resulted in a decrease in net interest                    income. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Though                    net income decreased in fiscal 2007, our financial condition                    and liquidity                    remain strong. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                    Company and the Bank are “well capitalized” under regulatory                    definitions. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                    allowance for loan losses increased by $260,000 in fiscal 2007,                    to                    $5,756,000, and, as a percentage of total loans, increased in                    fiscal 2007                    to 1.35% compared to 1.26% in fiscal                    2006. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Net                    income decreased to $1,886,677 for fiscal 2007 compared to $4,004,199                    for                    fiscal 2006. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

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**RESULTS          OF OPERATIONS**

| Rate/Volume                    Analysis for the Year EndedJune                    30, 2007 versus June 30, 2006 |   |
|-----------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                            |   |   |   |   |   |   |
|                                                                                                            |   | Difference                    Due to |   |   |   |   |
|                                                                                                            |   | Volume |   |   | Rate |   |   | Total |   |
| Investments                                                                                                     |   | $ | 131,490 |   |   | $ | 375,714 |   |   | $ | 507,204 |   |
| Loans,                    net                                                                                   |   |   | (1,075,851 | ) |   |   | 799,395 |   |   |   | (276,456 | ) |
| FHLB                    deposits & other                                                                    |   |   | 33,336 |   |   |   | 42,035 |   |   |   | 75,371 |   |
|   Total                    interest-earning assets                                                    |   |   | (911,025 | ) |   |   | 1,217,144 |   |   |   | 306,119 |   |
|                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| 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                                                        |   | $ | (670,514 | ) |   | $ | (2,359,759 | ) |   | $ | (3,030,273 | ) |

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| Rate/Volume                    Analysis for the Year EndedJune                    30, 2006 versus June 30, 2005 |   |
|-----------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                            |   |   |   |   |   |   |
|                                                                                                            |   | Difference                    Due to |   |   |   |   |
|                                                                                                            |   | Volume |   |   | Rate |   |   | Total |   |
| Investments                                                                                                     |   | $ | 437,837 |   |   | $ | 378,420 |   |   | $ | 816,257 |   |
| Loans,                    net                                                                                   |   |   | (314,444 | ) |   |   | 2,338,463 |   |   |   | 2,024,019 |   |
| FHLB                    deposits & other                                                                    |   |   | (8,398 | ) |   |   | 68,098 |   |   |   | 59,700 |   |
|   Total                    interest-earning assets                                                    |   |   | 114,995 |   |   |   | 2,784,981 |   |   |   | 2,899,976 |   |
|                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                                                        |   |   | 14,332 |   |   |   | 2,513,176 |   |   |   | 2,527,508 |   |
| Repurchase                    agreements                                                                        |   |   | 11,589 |   |   |   | 512,560 |   |   |   | 524,149 |   |
| Borrowings                                                                                                      |   |   | 42,541 |   |   |   | (300,440 | ) |   |   | (257,899 | ) |
|   Total                    interest-bearing liabilities                                               |   |   | 68,462 |   |   |   | 2,725,296 |   |   |   | 2,793,758 |   |
|    Net                    interest income                                                        |   | $ | 46,533 |   |   | $ | 59,685 |   |   | $ | 106,218 |   |

----

----

**FINANCIAL          CONDITION**

----

|                                           |   |                                       Consumer Loans |        |   |                          |   |
|------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------|-------------|--------|-------------------------------|--------|
|                                           |   | June                    30, 2007                                                                                                               |        |   | %                    of Total |   |   | June                    30, 2006 |   |   |  %                    of Total |   |
| Indirect                    Auto               |   | $                                                                                                                                              | 36,808,246  |   |                          |   | 31 | % |   | $ | 39,075,798 |   |   |   | 35 | % |
| Indirect                    RV                 |   |                                                                                                                                           | 51,611,223  |   |                          |   | 43 | % |   |   | 41,111,060 |   |   |   | 36 | % |
| Indirect                    Mobile Home        |   |                                                                                                                                           | 24,961,562  |   |                          |   | 21 | % |   |   | 28,212,411 |   |   |   | 25 | % |
|                      Subtotal Indirect    |   |                                                                                                                                           | 113,381,031 |   |                          |   | 95 | % |   |   | 108,399,269 |   |   |   | 96 | % |
| Other                                          |   |                                                                                                                                           | 5,499,692   |   |                          |   | 5 | % |   |   | 4,793,128 |   |   |   | 4 | % |
|                      Total Consumer Loans |   | $                                                                                                                                              | 118,880,723 |   |                          |   | 100 | % |   | $ | 113,192,397 |   |   |   | 100 | % |

----

----

| Brokered                    time deposits                  | $ 116,654,000                           | Subject                    to policy limitation of 25% of total assets                                     |
|------------------------------------------------------------|---------------------------------------------------|------------------------------------------------------------------------------------------------------------|
| Federal                    Home Loan Bank of Boston        | $                      19,576,000  | Unused                    advance capacity subject to eligible and qualified                    collateral |
| Fed                    Discount Window Borrower-in-Custody | $                      28,690,000  | Unused                    credit line subject to the pledge of indirect auto                    loans      |
| Total                    Unused Borrowing Capacity         | $ 164,920,000                           |                                                                                                       |

**ASSET          QUALITY**

----

| 06/30/07 | 06/30/06 | 06/30/05 | 06/30/04 |
|----------|----------|----------|----------|
| 2.90%    | 2.09%    | 1.09%    | 1.13%    |

| Description                                         |   | June                    30, 2007 |      |   | June                    30, 2006 |   |
|-----------------------------------------------------|--------|----------------------------------|-----------|--------|----------------------------------|--------|
| Residential                    real estate          |   | $                                | 477,000   |   |                             | $      | 521,000 |   |
| Commercial                    real estate           |   |                             | 2,033,000 |   |                             |   | 2,980,000 |   |
| Commercial                    loans                 |   |                             | 2,104,000 |   |                             |   | 1,553,000 |   |
| Consumer                    and other               |   |                             | 476,000   |   |                             |   | 141,000 |   |
|   Total                    non-performing |   | $                                | 5,090,000 |   |                             | $      | 5,195,000 |   |

----

**RISK          MANAGEMENT**

----

|                                               | Up                    200 Basis Points |   | Down                    200 Basis Points |
|----------------------------------------------------|----------------------------------------|--------|------------------------------------------|
| June                    30, 2007         | -1.80%                                 |   | 4.60%                                    |
|                                               |                                   |   |                                     |
|                                               | Up                    200 Basis Points |   | Down                    200 Basis Points |
| June                    30, 2006    | -0.17%                                 |   | 2.33%                                    |

**LIQUIDITY**

|  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  |   | 8.16%                            |   | 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                           |   | 6.42%                            |   |                                   |

----

**OFF-BALANCE          SHEET ARRANGEMENTS & AGGREGATE CONTRACTUAL OBLIGATIONS**

|   |      |                                                                           |                                                                                                                                                                                                                          |   |        |   | Payments                    Due by Period             |                                                            |
|--------|-----------|--------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|--------|-------------------------------------------------------|-----------------------------------------------------------------|
|   |      |  Contractual                    Obligations                               |                                                                                                                                                                                                                          | Total  |        |   | Less                    Than1                    Year |                                                            |   | 1-3Years |   |   | 4-5Years |   |   | After                    5Years |   |
|   |      | FHLB                    advances                                               |                                                                                                                                                                                                                          | $      | 93,016,698  |   |                                                  | $                                                               | 50,016,698 |   |   | $ | 33,000,000 |   |   | $ | 10,000,000 |   |   | $ | - |   |
|   |      | Junior                    subordinated debentures                              |                                                                                                                                                                                                                          |   | 16,496,000  |   |                                                  |                                                            | - |   |   |   | 16,496,000 |   |   |   | - |   |   |   | - |   |
|   |      | Capital                    lease obligation                                    |                                                                                                                                                                                                                          |   | 2,653,511   |   |                                                  |                                                            | 134,087 |   |   |   | 289,193 |   |   |   | 319,668 |   |   |   | 1,910,563 |   |
|   |      | Other                    borrowings                                            |                                                                                                                                                                                                                          |   | 2,292,163   |   |                                                  |                                                            | 534,522 |   |   |   | 997,665 |   |   |   | 405,777 |   |   |   | 354,199 |   |
|   |      |      Total                    long-term debt          |                                                                                                                                                                                                                          |   | 114,458,372 |   |                                                  |                                                            | 50,685,307 |   |   |   | 50,782,858 |   |   |   | 10,725,445 |   |   |   | 2,264,762 |   |
|   |      |                                                                           |                                                                                                                                                                                                                          |   |        |
|   |      | Operating                    lease obligations                                 |                                                                                                                                                                                                                          |   | 1,926,575   |   |                                                  |                                                            | 379,059 |   |   |   | 622,833 |   |   |   | 466,344 |   |   |   | 458,339 |   |
|   |      |      Total                    contractual obligations |                                                                                                                                                                                                                          | $      | 116,384,947 |   |                                                  | $                                                               | 51,064,366 |   |   | $ | 51,405,691 |   |   | $ | 11,191,789 |   |   | $ | 2,723,101 |   |
|   |      |                                                                           |                                                                                                                                                                                                                          |
|   |      |                                                                           |                                                                                                                                                                                                                          |   |        |   |                                                  | 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)                         |                                                                                                                                                                                                                          | $      | 10,003,000  |   |                                                  | $                                                               | 10,003,000 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|   |      | Commitments                    related to loans held for sale(2)               |                                                                                                                                                                                                                          |   | 2,557,000   |   |                                                  |                                                            | 2,557,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|   |      | Unused                    lines of credit (3)(4)                               |                                                                                                                                                                                                                          |   | 45,002,000  |   |                                                  |                                                            | 21,189,000 |   |   |   | 3,099,000 |   |   |   | 2,288,000 |   |   |   | 18,426,000 |   |
|   |      | Standby                    letters of credit (5)                               |                                                                                                                                                                                                                          |   | 696,000     |   |                                                  |                                                            | 696,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|   |      |                                                                           |                                                                                                                                                                                                                          | $      | 58,258,000  |   |                                                  | $                                                               | 34,445,000 |   |   | $ | 3,099,000 |   |   | $ | 2,288,000 |   |   | $ | 18,426,000 |   |
|   | (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.                                                                                                                                             |   |

----

**CAPITAL**

**IMPACT          OF INFLATION**

**IMPACT          OF NEW ACCOUNTING STANDARDS**

----

| **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 ACCOUNTING FIRM**

|                                       | /s/                Shatswell, MacLeod & Company, P.C.                           |
|--------------------------------------------|-------------------------------------------------------------------------------------|
| West                Peabody, Massachusetts |      Shatswell,                MacLeod & Company, P.C. |
| September                6, 2007           |                                                                                |

**REPORT        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

|                                 | /s/                  Baker Newman & Noyes |
|--------------------------------------|-----------------------------------------------|
| Portland,                  Maine     | Baker                  Newman & Noyes     |
|  August                11, 2006 | Limited                  Liability Company    |

----

**NORTHEAST      BANCORP AND SUBSIDIARY**

| ASSETS                                                                                                                             |   |
|------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                               |   | 2007 |   |   | 2006 |   |
| Cash                and due from banks                                                                                             |   | $ | 9,065,330 |   |   | $ | 9,573,908 |   |
| Interest-bearing                deposits                                                                                           |   |   | 1,676,391 |   |   |   | 1,099,813 |   |
| Federal                Home Loan Bank overnight deposits                                                                           |   |   | - |   |   |   | 1,430,000 |   |
| Total                cash and cash equivalents                                                                                     |   |   | 10,741,721 |   |   |   | 12,103,721 |   |
|                                                                                                                               |   |   |   |   |   |   |   |   |
| Available-for-sale                securities, at fair value                                                                        |   |   | 86,348,070 |   |   |   | 86,137,707 |   |
| Loans                held-for-sale                                                                                                 |   |   | 1,636,485 |   |   |   | 681,143 |   |
|                                                                                                                               |   |   |   |   |   |   |   |   |
| Loans                receivable                                                                                                    |   |   | 425,571,418 |   |   |   | 435,662,529 |   |
| Less                allowance for loan losses                                                                                      |   |   | 5,756,000 |   |   |   | 5,496,000 |   |
| Net                loans                                                                                                           |   |   | 419,815,418 |   |   |   | 430,166,529 |   |
|                                                                                                                               |   |   |   |   |   |   |   |   |
| Premises                and equipment - net                                                                                        |   |   | 7,545,430 |   |   |   | 7,315,881 |   |
| Acquired                assets - net                                                                                               |   |   | - |   |   |   | 10,384 |   |
| Accrued                interest receivable                                                                                         |   |   | 2,586,720 |   |   |   | 2,678,558 |   |
| Federal                Home Loan Bank stock, at cost                                                                               |   |   | 4,825,700 |   |   |   | 5,498,300 |   |
| Federal                Reserve Bank stock, at cost                                                                                 |   |   | 471,500 |   |   |   | 459,500 |   |
| Goodwill                                                                                                                           |   |   | 2,880,803 |   |   |   | 407,897 |   |
| Intangible                assets, net of accumulated amortization of $2,681,148 in 2007                and $2,366,564 in 2006 |   |   | 4,110,081 |   |   |   | 1,919,665 |   |
| Bank                owned life insurance (BOLI)                                                                                    |   |   | 9,844,584 |   |   |   | 8,895,326 |   |
| Other                assets                                                                                                        |   |   | 5,994,468 |   |   |   | 6,643,191 |   |
|                                                                                                                               |   |   |   |   |   |   |   |   |
| Total                assets                                                                                                        |   | $ | 556,800,980 |   |   | $ | 562,917,802 |   |

----

| **NORTHEAST                BANCORP AND SUBSIDIARY**                                                                                      |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED                BALANCE SHEETS                                                                                               |   |
| June                30, 2007 and 2006                                                                                                    |   |
|                                                                                                                                     |   |
| LIABILITIES                AND STOCKHOLDERS' EQUITY                                                             |   |
|                                                                                                                                     |   | 2007 |   |   | 2006 |   |
| Liabilities:                                                                                                                             |   |   |   |   |   |   |
| Deposits                                                                                                                                 |   |   |   |   |   |   |
| Demand                                                                                                                                   |   | $ | 36,332,604 |   |   | $ | 38,137,357 |   |
| NOW                                                                                                                                      |   |   | 53,405,241 |   |   |   | 54,432,157 |   |
| Money                market                                                                                                              |   |   | 8,053,552 |   |   |   | 9,430,378 |   |
| Regular                savings                                                                                                           |   |   | 21,145,567 |   |   |   | 24,247,324 |   |
| Brokered                time deposits                                                                                                    |   |   | 22,546,163 |   |   |   | 51,859,091 |   |
| Certificates                of deposit under $100,000                                                                                    |   |   | 154,972,970 |   |   |   | 152,681,352 |   |
| Certificates                of deposit $100,000 or more                                                                                  |   |   | 68,097,680 |   |   |   | 64,505,718 |   |
| Total                deposits                                                                                                            |   |   | 364,553,777 |   |   |   | 395,293,377 |   |
|                                                                                                                                     |   |   |   |   |   |   |   |   |
| Federal                Home Loan Bank advances                                                                                           |   |   | 93,016,698 |   |   |   | 75,888,598 |   |
| Short-term                borrowings                                                                                                     |   |   | 33,105,377 |   |   |   | 29,637,426 |   |
| Junior                subordinated debentures issued to affiliated trusts                                                                |   |   | 16,496,000 |   |   |   | 16,496,000 |   |
| Capital                lease obligation                                                                                                  |   |   | 2,653,511 |   |   |   | 2,781,046 |   |
| Other                borrowings                                                                                                          |   |   | 2,292,163 |   |   |   | 57,129 |   |
| Other                liabilities                                                                                                         |   |   | 3,833,576 |   |   |   | 3,668,101 |   |
| Total                liabilities                                                                                                         |   |   | 515,951,102 |   |   |   | 523,821,677 |   |
|                                                                                                                                     |   |   |   |   |   |   |   |   |
| 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; 2,448,832              and 2,447,132 shares outstanding |   |   |   |   |   |   |   |   |
|                   at June 30, 2007 and                2006, respectively                                                       |   |   | 2,448,832 |   |   |   | 2,447,132 |   |
| Additional                paid-in capital                                                                                                |   |   | 4,715,164 |   |   |   | 4,675,258 |   |
| Retained                earnings                                                                                                         |   |   | 35,600,428 |   |   |   | 34,596,204 |   |
| Accumulated                other comprehensive loss                                                                                      |   |   | (1,914,546 | ) |   |   | (2,622,469 | ) |
|                                                                                                                                     |   |   |   |   |   |   |   |   |
| Total                stockholders' equity                                                                                                |   |   | 40,849,878 |   |   |   | 39,096,125 |   |
|                                                                                                                                     |   |   |   |   |   |   |   |   |
| Total                liabilities and stockholders' equity                                                                                |   | $ | 556,800,980 |   |   | $ | 562,917,802 |   |
|                                                                                                                                     |   |
| The                accompanying notes are an integral part of these consolidated financial                statements.                    |   |

----

**NORTHEAST      BANCORP AND SUBSIDIARY**

|                                                                                                                  |   | 2007   |       |   | 2006   |   |       | 2005   |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Interest                and dividend income:                                                                          |   |   |       |   |   |   |       |   |   |
| Interest                and fees on loans                                                                             |   | $      | 31,366,547 |   |   | $      | 31,643,003 |   |   | $ | 29,618,984 |   |
| Interest                on Federal Home Loan Bank overnight deposits                                                  |   |   | 152,805    |   |   |   | 93,017     |   |   |   | 52,912 |   |
| Taxable                interest on available-for-sale securities                                                      |   |   | 3,154,072  |   |   |   | 2,947,224  |   |   |   | 2,568,558 |   |
| Tax-exempt                interest on available-for-sale securities                                                   |   |   | 442,311    |   |   |   | 264,839    |   |   |   | - |   |
| Dividends                on available-for-sale securities                                                             |   |   | 140,954    |   |   |   | 130,605    |   |   |   | 146,678 |   |
| Dividends                on Federal Home Loan Bank and Federal Reserve Bank                stock                 |   |   | 368,463    |   |   |   | 335,900    |   |   |   | 264,777 |   |
| Other                interest and dividend income                                                                     |   |   | 57,203     |   |   |   | 41,620     |   |   |   | 22,025 |   |
|                                                                                                                  |   |   |       |   |   |   |       |   |   |   |   |   |
| Total                interest and dividend income                                                                     |   |   | 35,682,355 |   |   |   | 35,456,208 |   |   |   | 32,673,934 |   |
|                                                                                                                  |   |   |       |   |   |   |       |   |   |   |   |   |
| Interest                expense:                                                                                      |   |   |       |   |   |   |       |   |   |   |   |   |
| Deposits                                                                                                              |   |   | 13,490,173 |   |   |   | 11,152,306 |   |   |   | 8,624,798 |   |
| Federal                Home Loan Bank advances                                                                        |   |   | 3,819,550  |   |   |   | 3,482,655  |   |   |   | 3,850,815 |   |
| Short-term                borrowings                                                                                  |   |   | 1,504,936  |   |   |   | 927,688    |   |   |   | 403,539 |   |
| Junior                subordinated debentures issued to affiliated trusts                                             |   |   | 1,080,538  |   |   |   | 1,063,681  |   |   |   | 1,087,696 |   |
| Obligation                under capital lease agreements                                                              |   |   | 136,726    |   |   |   | 130,583    |   |   |   | - |   |
| Other                borrowings                                                                                       |   |   | 65,075     |   |   |   | 3,693      |   |   |   | - |   |
|                                                                                                                  |   |   |       |   |   |   |       |   |   |   |   |   |
| Total                interest expense                                                                                 |   |   | 20,096,998 |   |   |   | 16,760,606 |   |   |   | 13,966,848 |   |
|                                                                                                                  |   |   |       |   |   |   |       |   |   |   |   |   |
| Net                interest and dividend income before provision for loan                losses                       |   |   | 15,585,357 |   |   |   | 18,695,602 |   |   |   | 18,707,086 |   |
|                                                                                                                  |   |   |       |   |   |   |       |   |   |   |   |   |
| Provision                for loan losses                                                                              |   |   | 989,158    |   |   |   | 1,226,413  |   |   |   | 1,301,600 |   |
|                                                                                                                  |   |   |       |   |   |   |       |   |   |   |   |   |
| Net                interest and dividend income after provision for loan                losses                   |   |   | 14,596,199 |   |   |   | 17,469,189 |   |   |   | 17,405,486 |   |
|                                                                                                                  |   |   |       |   |   |   |       |   |   |   |   |   |
| Noninterest                income:                                                                                    |   |   |       |   |   |   |       |   |   |   |   |   |
| Fees                and service charges on loans                                                                      |   |   | 79,885     |   |   |   | 97,630     |   |   |   | 100,858 |   |
| Fees                for other services to customers                                                                   |   |   | 1,042,648  |   |   |   | 1,114,081  |   |   |   | 1,067,116 |   |
| Net                securities gains                                                                                   |   |   | 42,349     |   |   |   | 17,335     |   |   |   | 67,940 |   |
| Loss                on trading activities                                                                             |   |   | -          |   |   |   | -          |   |   |   | (83 | ) |
| Gain                on sales of loans                                                                                 |   |   | 869,255    |   |   |   | 308,777    |   |   |   | 233,027 |   |
| Investment                and insurance commissions                                                                   |   |   | 4,715,553  |   |   |   | 3,686,122  |   |   |   | 2,858,897 |   |
| BOLI                income                                                                                            |   |   | 388,613    |   |   |   | 366,939    |   |   |   | 330,700 |   |
| Other                                                                                                                 |   |   | 806,524    |   |   |   | 1,003,997  |   |   |   | 492,724 |   |
|                                                                                                                  |   |   |       |   |   |   |       |   |   |   |   |   |
| Total                noninterest income                                                                               |   |   | 7,944,827  |   |   |   | 6,594,881  |   |   |   | 5,151,179 |   |
|                                                                                                                  |   |   |       |   |   |   |       |   |   |   |   |   |
| Noninterest                expense:                                                                                   |   |   |       |   |   |   |       |   |   |   |   |   |
| Salaries                and employee benefits                                                                         |   |   | 12,022,037 |   |   |   | 10,637,758 |   |   |   | 9,554,317 |   |
| Occupancy                expense                                                                                      |   |   | 1,722,381  |   |   |   | 1,672,505  |   |   |   | 1,418,696 |   |
| Equipment                expense                                                                                      |   |   | 1,531,276  |   |   |   | 1,440,238  |   |   |   | 1,110,108 |   |
| Intangible                assets amortization                                                                         |   |   | 314,584    |   |   |   | 241,028    |   |   |   | 249,701 |   |
| Other                                                                                                                 |   |   | 4,484,908  |   |   |   | 4,216,975  |   |   |   | 4,351,352 |   |
|                                                                                                                  |   |   |       |   |   |   |       |   |   |   |   |   |
| Total                noninterest expense                                                                              |   |   | 20,075,186 |   |   |   | 18,208,504 |   |   |   | 16,684,174 |   |
|                                                                                                                  |   |   |       |   |   |   |       |   |   |   |   |   |
|            Income                before income taxes           |   |   | 2,465,840  |   |   |   | 5,855,566  |   |   |   | 5,872,491 |   |
|                                                                                                                  |   |   |       |   |   |   |       |   |   |   |   |   |
| Income                tax expense                                                                                     |   |   | 579,163    |   |   |   | 1,851,367  |   |   |   | 1,853,857 |   |
|                                                                                                                  |   |   |       |   |   |   |       |   |   |   |   |   |
| Net                income                                                                                             |   | $      | 1,886,677  |   |   | $      | 4,004,199  |   |   | $ | 4,018,634 |   |
|                                                                                                                  |   |   |       |   |   |   |       |   |   |   |   |   |
| Earnings                per common share:                                                                             |   |   |       |   |   |   |       |   |   |   |   |   |
| Basic                                                                                                                 |   | $      | 0.77       |   |   | $      | 1.61       |   |   | $ | 1.60 |   |
| Diluted                                                                                                               |   | $      | 0.76       |   |   | $      | 1.59       |   |   | $ | 1.57 |   |
|                                                                                                                  |   |
| The                accompanying notes are an integral part of these consolidated financial                statements. |   |

----

**NORTHEAST      BANCORP AND SUBSIDIARY**

|                                                                                                                  |   | Preferred                 Stock |   |   | Common Stock |   |      | AdditionalPaid-in Capital |   |   | Retained Earnings |   |   | AccumulatedOtherComprehensive Loss |       |   |  Total |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------|--------|--------|-------------------|--------|-----------|--------------------------------|--------|--------|------------------------|--------|--------|-----------------------------------------|------------|--------|-------------|--------|
| Balance                at June 30, 2004                                                                               |   | $                                    | -      |   |              | $      | 2,525,416 |                           |   | $      | 6,943,894              |   |   | $                                       | 28,380,678 |   |        | $      | (1,396,968 | ) |   | $ | 36,453,020 |   |
|                                                                                                                  |   |                                 |   |   |              |   |      |                           |   |   |                   |   |   |                                    |       |   |        |   |   |   |   |   |   |   |
| Net                income                                                                                             |   |                                 | -      |   |              |   | -         |                           |   |   | -                      |   |   |                                    | 4,018,634  |   |        |   | - |   |   |   | 4,018,634 |   |
|                Other              comprehensive income net of tax:                                               |   |                                 |   |   |              |   |      |                           |   |   |                   |   |   |                                    |       |   |        |   |   |   |   |   |   |   |
|                  Net unrealized losses on investments                                                  |   |                                 |   |   |              |   |      |                           |   |   |                   |   |   |                                    |       |   |        |   |   |   |   |   |   |   |
|                    available-for-sale, net of reclassification                               |   |                                 |   |   |              |   |      |                           |   |   |                   |   |   |                                    |       |   |        |   |   |   |   |   |   |   |
|                    adjustment                                                                          |   |                                 | -      |   |              |   | -         |                           |   |   | -                      |   |   |                                    | -          |   |        |   | 726,781 |   |   |   | 726,781 |   |
|                    Total comprehensive income                                                          |   |                                 | -      |   |              |   | -         |                           |   |   | -                      |   |   |                                    |       |   |        |   |   |   |   |   | 4,745,415 |   |
|                                                                                                                  |   |                                 |   |   |              |   |      |                           |   |   |                   |   |   |                                    |       |   |        |   |   |   |   |   |   |   |
| Purchase                of 43,609 shares of Company                stock                                              |   |                                 | -      |   |              |   | (43,609   | )                              |   |   | (799,893               | )      |   |                                    | -          |   |        |   | - |   |   |   | (843,502 | ) |
| Stock                options exercised                                                                                |   |                                 | -      |   |              |   | 37,875    |                           |   |   | 385,410                |   |   |                                    | -          |   |        |   | - |   |   |   | 423,285 |   |
| Stock                grant                                                                                            |   |                                 | -      |   |              |   | 150       |                           |   |   | 1,425                  |   |   |                                    | -          |   |        |   | - |   |   |   | 1,575 |   |
| Dividends                on common stock at $0.36  per                share                                 |   |                                 | -      |   |              |   | -         |                           |   |   | -                      |   |   |                                    | (910,220   | )      |        |   | - |   |   |   | (910,220 | ) |
|                                                                                                                  |   |                                 |   |   |              |   |      |                           |   |   |                   |   |   |                                    |       |   |        |   |   |   |   |   |   |   |
| 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 losses 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 |   |
|                                                                                                                  |   |                                 |   |   |              |   |      |                           |
|                                                                                                                  |   |                                 |   |   |              |   |      |                           |
| The                accompanying notes are an integral part of these consolidated financial                statements. |   |                                 |   |

----

**NORTHEAST      BANCORP AND SUBSIDIARY**

|                                                                                                                       |   | 2007   |        |   | 2006   |   |         | 2005   |   |
|----------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|--------------|--------|--------|
| Cash                flows from operating activities:                                                                       |   |   |        |   |   |   |         |   |   |
| Net                income                                                                                                  |   | $      | 1,886,677   |   |   | $      | 4,004,199    |   |   | $ | 4,018,634 |   |
| Adjustments                to reconcile net income to net cash  provided                by operating activities: |   |   |        |   |   |   |         |   |   |   |   |   |
|  Provision                for loan losses                                                                             |   |   | 989,158     |   |   |   | 1,226,413    |   |   |   | 1,301,600 |   |
|  Provision                for losses on acquired assets                                                               |   |   | 6,384       |   |   |   | 2,500        |   |   |   | 20,000 |   |
|  Provision                made for deferred compensation                                                              |   |   | 276,539     |   |   |   | 399,845      |   |   |   | 98,000 |   |
|  Write-down                of available-for-sale securities                                                           |   |   | 50,442      |   |   |   | 38,394       |   |   |   | 27,849 |   |
|  Write-down                of non-marketable securities                                                               |   |   | 248,482     |   |   |   | 42,257       |   |   |   | 96,931 |   |
|  Deferred                income tax benefit                                                                           |   |   | (329,268    | )      |   |   | (323,220     | )      |   |   | (197,522 | ) |
|  BOLI                income, net                                                                                      |   |   | (349,258    | )      |   |   | (366,939     | )      |   |   | (274,347 | ) |
|  Depreciation                of premises and equipment                                                                |   |   | 1,088,373   |   |   |   | 1,048,529    |   |   |   | 711,339 |   |
|  Amortization                of intangible assets                                                                     |   |   | 314,584     |   |   |   | 241,028      |   |   |   | 249,701 |   |
|  Net                gain on sale of available-for-sale securities                                                     |   |   | (42,349     | )      |   |   | (17,335      | )      |   |   | (67,940 | ) |
|  Net                (gain) loss on disposals, writedowns and sale of                fixed assets                 |   |   | (73,962     | )      |   |   | 128,363      |   |   |   | (59,719 | ) |
|  Gain                on sale of deposits                                                                              |   |   | -           |   |   |   | (500,845     | )      |   |   | - |   |
|  Net                change of loans held-for-sale                                                                     |   |   | (955,342    | )      |   |   | (362,293     | )      |   |   | 226,872 |   |
|  Other                                                                                                                |   |   | 27,839      |   |   |   | 21,962       |   |   |   | (350,028 | ) |
|  Change                in other assets and liabilities:                                                               |   |   |        |   |   |   |         |   |   |   |   |   |
| Interest                receivable                                                                                         |   |   | 91,838      |   |   |   | (123,669     | )      |   |   | (361,720 | ) |
| Other                assets and liabilities                                                                                |   |   | 28,754      |   |   |   | 106,976      |   |   |   | 631,272 |   |
|                                                                                                                       |   |   |        |   |   |   |         |   |   |   |   |   |
| Net                cash provided by operating activities                                                                   |   |   | 3,258,891   |   |   |   | 5,566,165    |   |   |   | 6,070,922 |   |
|                                                                                                                       |   |   |        |   |   |   |         |   |   |   |   |   |
| Cash                flows from investing activities:                                                                       |   |   |        |   |   |   |         |   |   |   |   |   |
| Federal                Reserve Bank stock purchased                                                                        |   |   | (12,000     | )      |   |   | (54,000      | )      |   |   | (405,500 | ) |
| Proceeds                from redemption of Federal Home Loan Bank stock                                                    |   |   | 672,600     |   |   |   | 1,146,200    |   |   |   | - |   |
| Proceeds                from the sales of available-for-sale securities                                                    |   |   | 2,290,571   |   |   |   | 1,354,098    |   |   |   | 1,126,131 |   |
| Purchases                of available-for-sale securities                                                                  |   |   | (14,720,181 | )      |   |   | (25,311,089  | )      |   |   | (22,862,781 | ) |
| Proceeds                from maturities and principal payments  on                available-for-sale securities  |   |   | 13,255,927  |   |   |   | 9,078,452    |   |   |   | 15,859,638 |   |
| Net                decrease (increase) in loans                                                                            |   |   | 9,361,953   |   |   |   | 24,729,918   |   |   |   | (29,502,226 | ) |
| Purchases                of premises and equipment                                                                         |   |   | (1,373,474  | )      |   |   | (1,111,469   | )      |   |   | (1,241,683 | ) |
| Proceeds                from sales of premises and equipment                                                               |   |   | 246,610     |   |   |   | -            |   |   |   | 481,794 |   |
| Proceeds                from sales of acquired assets                                                                      |   |   | 4,000       |   |   |   | 244,722      |   |   |   | 497,507 |   |
| Other                                                                                                                      |   |   | -           |   |   |   | -            |   |   |   | (75,492 | ) |
| Purchase                of retirement annuity                                                                              |   |   | -           |   |   |   | -            |   |   |   | (900,000 | ) |
| Purchase                of BOLI                                                                                            |   |   | (600,000    | )      |   |   | -            |   |   |   | (529,184 | ) |
| Cash                paid in connection with acquisition of  insurance                agencies                    |   |   | (2,450,000  | )      |   |   | -            |   |   |   | (993,469 | ) |
|                                                                                                                       |   |   |        |   |   |   |         |   |   |   |   |   |
| Net                cash provided (used) by investing activities                                                            |   |   | 6,676,006   |   |   |   | 10,076,832   |   |   |   | (38,545,265 | ) |
|                                                                                                                       |   |   |        |   |   |   |         |   |   |   |   |   |
| Cash                flows from financing activities:                                                                       |   |   |        |   |   |   |         |   |   |   |   |   |
| Net                (decrease) increase in deposits                                                                         |   |   | (30,739,600 | )      |   |   | 7,267,169    |   |   |   | 18,398,993 |   |
| Cash                paid on sale of deposits                                                                               |   |   | -           |   |   |   | (7,691,669   | )      |   |   | - |   |
| Advances                from the Federal Home Loan Bank                                                                    |   |   | 43,000,000  |   |   |   | 105,000,000  |   |   |   | 33,000,000 |   |
| Repayment                of advances from the Federal Home Loan Bank                                                       |   |   | (36,831,900 | )      |   |   | (115,309,004 | )      |   |   | (24,403,032 | ) |
| Net                advances (repayments) on Federal Home Loan  Bank                overnight advances            |   |   | 10,960,000  |   |   |   | -            |   |   |   | (5,377,000 | ) |
| Net                increase (decrease) in short-term borrowings                                                            |   |   | 3,467,951   |   |   |   | (3,741,986   | )      |   |   | 8,494,543 |   |
| Dividends                paid                                                                                              |   |   | (882,453    | )      |   |   | (897,087     | )      |   |   | (910,220 | ) |
| Company                stock purchased                                                                                     |   |   | (67,944     | )      |   |   | (2,142,250   | )      |   |   | (698,812 | ) |
| Issuance                of common stock                                                                                    |   |   | 6,550       |   |   |   | 213,972      |   |   |   | 280,170 |   |
| Proceeds                from issuance of junior subordinated debentures                                                    |   |   | -           |   |   |   | -            |   |   |   | 10,310,000 |   |
| Repayment                of junior subordinated debentures                                                                 |   |   | -           |   |   |   | -            |   |   |   | (7,394,849 | ) |
| Repayment                on debt from insurance agencies acquisitions                                                      |   |   | (81,966     | )      |   |   | -            |   |   |   | - |   |
| Repayment                on capital lease obligation                                                                       |   |   | (127,535    | )      |   |   | (111,656     | )      |   |   | - |   |
|                                                                                                                       |   |   |        |   |   |   |         |   |   |   |   |   |
| Net                cash (used) provided by financing activities                                                            |   |   | (11,296,897 | )      |   |   | (17,412,511  | )      |   |   | 31,699,793 |   |
|                                                                                                                       |   |   |        |   |   |   |         |   |   |   |   |   |
| Net                decrease in cash and cash equivalents                                                                   |   |   | (1,362,000  | )      |   |   | (1,769,514   | )      |   |   | (774,550 | ) |
|                                                                                                                       |   |   |        |   |   |   |         |   |   |   |   |   |
| Cash                and cash equivalents, beginning of year                                                                |   |   | 12,103,721  |   |   |   | 13,873,235   |   |   |   | 14,647,785 |   |
|                                                                                                                       |   |   |        |   |   |   |         |   |   |   |   |   |
| Cash                and cash equivalents, end of year                                                                      |   | $      | 10,741,721  |   |   | $      | 12,103,721   |   |   | $ | 13,873,235 |   |
|                                                                                                                       |   |   |        |   |   |   |         |   |   |   |   |   |
| Supplemental                schedule of cash flow information:                                                             |   |   |        |   |   |   |         |   |   |   |   |   |
| Interest                paid                                                                                               |   | $      | 20,120,234  |   |   | $      | 16,872,352   |   |   | $ | 13,214,688 |   |
| Income                taxes paid                                                                                           |   |   | 819,500     |   |   |   | 2,220,561    |   |   |   | 2,017,222 |   |
|                                                                                                                       |   |   |        |   |   |   |         |   |   |   |   |   |
| Supplemental                schedule of noncash investing and financing                activities:                         |   |   |        |   |   |   |         |   |   |   |   |   |
| Transfer                from loans to acquired assets                                                                      |   | $      | -           |   |   | $      | 173,800      |   |   | $ | 570,339 |   |
| Stock                tendered in cashless stock option exercise                                                            |   |   | -           |   |   |   | -            |   |   |   | 144,690 |   |
|                 Change in valuation allowance for unrealized losses (gains)              on available-for-sale   |   |   |        |   |   |   |         |   |   |   |   |   |
|   securities,                net of tax                                                                          |   |   | 707,923     |   |   |   | 1,952,282    |   |   |   | (726,781 | ) |
| Net                change in deferred taxes for unrealized losses (gains)                on available-for-sale securities  |   |   | 364,689     |   |   |   | 1,005,701    |   |   |   | (374,404 | ) |
| Transfer                from loan loss allowance to other liabilities for                off balance sheet credit risk     |   |   | -           |   |   |   | 204,086      |   |   |   | - |   |
| Capital                lease asset and related obligation                                                                  |   |   | -           |   |   |   | 2,892,702    |   |   |   | - |   |
| Stock                issued in branch purchase                                                                             |   |   | 103,000     |   |   |   | -            |   |   |   | - |   |
|                                                                                                                       |   |
| The                accompanying notes are an integral part of these consolidated financial                statements.      |   |

----

**NORTHEAST      BANCORP AND SUBSIDIARY**

**1.  Summary of Significant Accounting      Policies**

*Business*

*Principles      of Consolidation*

*Consolidation of Variable Interest Entities*

*Use      of Estimates*

*Cash      and Cash Equivalents*

*Available-for-sale      Securities*

*Federal      Home Loan Bank and Federal Reserve Bank Stock*

*Loans      held-for-sale and Mortgage Banking Activities*

*Loans*

----

*Allowance      for Loan Losses*

*Premises      and Equipment*

*Income      Taxes*

*Acquired      Assets*

*Goodwill      and Intangible Assets*

*Goodwill and Other Intangible Assets*

----

*Advertising      Expense*

*Stock-Based      Compensation*

*Shared-Based Payment*

|                                                                                                                                                                                                                                    |   | Years                Ended June 30, |      |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|-----------|
|                                                                                                                                                                                                                                    |   | 2007                                |      |   | 2006 |   |   | 2005 |   |
|                                                                                                                                                                                                                                    |   |
| Net                income, as reported                                                                                                                                                                                                  |   | $                                   | 1,886,677 |   |   | $ | 4,004,199 |   |   | $ | 4,018,634 |   |
| Deduct:  total                stock-based employee compensation                expense determined under fair  value                based method for all awards, net of related tax                effects |   |                                | -         |   |   |   | - |   |   |   | 1,513 |   |
|                                                                                                                                                                                                                                    |   |                                |      |   |   |   |   |   |   |   |   |   |
| Pro                forma net income                                                                                                                                                                                                     |   | $                                   | 1,886,677 |   |   | $ | 4,004,199 |   |   | $ | 4,017,121 |   |
|                                                                                                                                                                                                                                    |   |                                |      |   |   |   |   |   |   |   |   |   |
| Earnings                per share:                                                                                                                                                                                                      |   |                                |      |   |   |   |   |   |   |   |   |   |
| Basic                - as reported                                                                                                                                                                                                      |   | $                                   | .77       |   |   | $ | 1.61 |   |   | $ | 1.60 |   |
| Basic                - pro forma                                                                                                                                                                                                        |   | $                                   | .77       |   |   | $ | 1.61 |   |   | $ | 1.59 |   |
| Diluted                - as reported                                                                                                                                                                                                    |   | $                                   | .76       |   |   | $ | 1.59 |   |   | $ | 1.57 |   |
| Diluted                - pro forma                                                                                                                                                                                                      |   | $                                   | .76       |   |   | $ | 1.59 |   |   | $ | 1.57 |   |

|                                       |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|--------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                       |   |   |   |   |   |   |   |   |   |
| Weighted                average fair value |   | $      | -      |   |   | $      | -      |   |   | $ | 1,513 |   |
| Dividend                yield              |   |   | -      |   |   |   | -      |   |   |   | 2.8 | % |
| Expected                volatility         |   |   | -      |   |   |   | -      |   |   |   | 24.3 | % |
| Risk-free                interest rates    |   |   | -      |   |   |   | -      |   |   |   | 4.5 | % |
| Expected                lives              |   |   | -      |   |   |   | -      |   |   | 8                years |   |

*Bank-Owned      Life Insurance*

----

*Comprehensive      Income*

*Derivatives*

*Accounting for Derivative Instruments      and Hedging Activities*

*Trust      Assets*

*Treasury      Stock*

*Reclassifications*

*New      Accounting Pronouncements*

*Accounting for Certain Hybrid      Instruments*

*Accounting for Servicing of Financial      Assets - an amendment of FASB Statement No. 140*

*Fair Value Measurements*

----

*The Fair Value Option for      Financial Assets and Financial Liabilities including an amendment of FASB      Statement No. 115*

**2.   Available-for-sale      securities**

|                                                                                                                            |   | 2007                       |       |   | 2006                        |   |
|---------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|------------|--------|-----------------------------|--------|
|                                                                                                                            |   | AmortizedCost              |       |   | Fair Value             |   |   | AmortizedCost |   |   | Fair Value |   |
| Debt                securities issued by U.S. Government-sponsored                enterprises                              |   | $                          | 21,765,732 |   |                        | $      | 21,158,409 |   |   | $ | 25,766,682 |   |   | $ | 24,694,409 |   |
| Mortgage-backed                securities                                                                                       |   |                       | 53,987,824 |   |                        |   | 52,138,732 |   |   |   | 50,618,118 |   |   |   | 48,126,031 |   |
| Municipal                bonds                                                                                                  |   |                       | 11,067,197 |   |                        |   | 10,709,069 |   |   |   | 11,075,274 |   |   |   | 10,770,167 |   |
| Corporate                bonds                                                                                                  |   |                       | 500,000    |   |                        |   | 484,625 |   |   |   | 500,000 |   |   |   | 477,520 |   |
| Equity                securities                                                                                                |   |                       | 1,928,144  |   |                        |   | 1,857,235 |   |   |   | 2,151,072 |   |   |   | 2,069,580 |   |
|                                                                                                                            |   |                       |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                            |   | $                          | 89,248,897 |   |                        | $      | 86,348,070 |   |   | $ | 90,111,146 |   |   | $ | 86,137,707 |   |
|                                                                                                                            |   |
| The                gross unrealized gains and unrealized losses on available-for-sale                securities are as follows: |   |
|                                                                                                                            |   |
|                                                                                                                            |   | 2007                       |       |   | 2006                        |   |
|                                                                                                                            |   | GrossUnrealized Gains |       |   | GrossUnrealized Losses |   |   | GrossUnrealized Gains |   |   | GrossUnrealized Losses |   |
| Debt                securities issued by U. S. Government-sponsored                enterprises                             |   | $                          | -          |   |                        | $      | 607,323 |   |   | $ | - |   |   | $ | 1,072,273 |   |
| Mortgage-backed                securities                                                                                       |   |                       | 2,818      |   |                        |   | 1,851,910 |   |   |   | 2,289 |   |   |   | 2,494,376 |   |
| Municipal                bonds                                                                                                  |   |                       | -          |   |                        |   | 358,128 |   |   |   | - |   |   |   | 305,107 |   |
| Corporate                bonds                                                                                                  |   |                       | -          |   |                        |   | 15,375 |   |   |   | - |   |   |   | 22,480 |   |
| Equity                securities                                                                                                |   |                       | 18,661     |   |                        |   | 89,570 |   |   |   | 22,809 |   |   |   | 104,301 |   |
|                                                                                                                            |   |                       |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                            |   | $                          | 21,479     |   |                        | $      | 2,922,306 |   |   | $ | 25,098 |   |   | $ | 3,998,537 |   |

|                                                      |   | Less                than 12 Months |       |   | More                than 12 Months |   |    | Total           |   |
|-----------------------------------------------------------|--------|------------------------------------|------------|--------|------------------------------------|--------|---------|-----------------|--------|
|                                                      |   | Fair Value                    |       |   | Unrealized Losses             |   |    | Fair Value |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |
| 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 |   |

----

|                                                |   | 2007   |       |   | 2006   |   |
|-----------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                                |   |
| Net                unrealized losses                |   | $      | (2,900,827 | )      |   | $      | (3,973,439 | ) |
| Deferred                tax effect                  |   |   | 986,281    |   |   |   | 1,350,970 |   |
|                                                |   |
| Accumulated                other comprehensive loss |   | $      | (1,914,546 | )      |   | $      | (2,622,469 | ) |

|                                                                                                                                       |   |  Cost |       |   | Fair Value |   |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|------------|--------|-----------------|--------|
|                                                                                                                                       |   |
|                   Due one year or less                                                                                           |   | $          | 6,505,701  |   |            | $      | 6,410,365 |   |
|                   Due after one year through five years                                                                          |   |       | 13,370,205 |   |            |   | 12,989,363 |   |
|                   Due after five years through ten years                                                                         |   |       | 996,925    |   |            |   | 972,840 |   |
|                   Due after ten years                                                                                            |   |       | 12,460,098 |   |            |   | 11,979,535 |   |
|                                                                                                                                       |   |
|                                                                                                                                       |   |       | 33,332,929 |   |            |   | 32,352,103 |   |
|  Mortgage-backed              securities (consisting of securities with interest rates              ranging from 4.00% to 6.375% |   |       |       |   |            |   |   |   |
|                   maturing November 2007 to                April 2036)                                                      |   |       | 53,987,824 |   |            |   | 52,138,732 |   |
| Equity                securities                                                                                                           |   |       | 1,928,144  |   |            |   | 1,857,235 |   |
|                                                                                                                                       |   |
|                                                                                                                                       |   | $          | 89,248,897 |   |            | $      | 86,348,070 |   |

----

**3.   Loans      Receivable**

|                                                     |   | 2007   |        |   | 2006   |   |
|----------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| Mortgage                loans:                           |   |   |        |   |   |   |
| Residential                real estate                   |   | $      | 145,184,733 |   |   | $      | 149,099,809 |   |
| Commercial                real estate                    |   |   | 112,534,812 |   |   |   | 115,327,157 |   |
| Construction                                             |   |   | 7,707,432   |   |   |   | 7,480,823 |   |
| Total                mortgage loans                      |   |   | 265,426,977 |   |   |   | 271,907,789 |   |
|                                                     |   |   |        |   |   |   |   |   |
| Commercial                loans                          |   |   | 40,783,958  |   |   |   | 50,261,725 |   |
| Consumer                and other loans                  |   |   | 118,880,723 |   |   |   | 113,192,397 |   |
|                                                     |   |   | 425,091,658 |   |   |   | 435,361,911 |   |
| Undisbursed                portion of construction loans |   |   | (2,256,606  | )      |   |   | (2,375,257 | ) |
| Net                deferred loan origination costs       |   |   | 2,736,366   |   |   |   | 2,675,875 |   |
|                                                     |   |   | 425,571,418 |   |   |   | 435,662,529 |   |
|                                                     |   |   |        |   |   |   |   |   |
| Less                allowance for loan losses            |   |   | 5,756,000   |   |   |   | 5,496,000 |   |
|                                                     |   |   |        |   |   |   |   |   |
| Net                loans                                 |   | $      | 419,815,418 |   |   | $      | 430,166,529 |   |

|                                                                                                                        |   | Years                Ended June 30, |      |
|-----------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|-----------|
|                                                                                                                        |   | 2007                                |      |   | 2006 |   |   | 2005 |   |
|                                                                                                                        |   |
| Balance                at beginning of year                                                                                 |   | $                                   | 5,496,000 |   |   | $ | 5,104,000 |   |   | $ | 4,577,000 |   |
| Provision                charged to operating expenses                                                                      |   |                                | 989,158   |   |   |   | 1,226,413 |   |   |   | 1,301,600 |   |
| Transferred                to off balance sheet credit risk reserve included  in                other liabilities |   |                                | -         |   |   |   | (204,086 | ) |   |   | - |   |
|                                                                                                                        |   |
| Loans                charged off                                                                                            |   |                                | (854,631  | ) |   |   | (793,653 | ) |   |   | (935,285 | ) |
| Recoveries                on loans previously charged off                                                                   |   |                                | 125,473   |   |   |   | 163,326 |   |   |   | 160,685 |   |
|                                                                                                                        |   |                                |      |   |   |   |   |   |   |   |   |   |
| Net                loans charged off                                                                                        |   |                                | (729,158  | ) |   |   | (630,327 | ) |   |   | (774,600 | ) |
|                                                                                                                        |   |                                |      |   |   |   |   |   |   |   |   |   |
| Balance                at end of year                                                                                       |   | $                                   | 5,756,000 |   |   | $ | 5,496,000 |   |   | $ | 5,104,000 |   |

----

|                                                             |   | 2007   |      |   | 2006   |   |      | 2005   |   |
|------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
|                                                             |   |
| Impaired                loans                                    |   | $      | 2,498,498 |   |   | $      | 7,128,111 |   |   | $ | 2,190,143 |   |
| Impaired                loans with related allowances            |   |   | 884,543   |   |   |   | 5,950,923 |   |   |   | 810,543 |   |
| Allowances                on impaired loans                      |   |   | 322,402   |   |   |   | 1,290,960 |   |   |   | 118,778 |   |
|                                                             |   |
| Average                balance of impaired loans during the year |   |   | 2,269,862 |   |   |   | 4,584,621 |   |   |   | 1,760,925 |   |
| Interest                recognized on impaired loans             |   |   | 211,346   |   |   |   | 71,400    |   |   |   | 85,900 |   |

**4.   Premises      and Equipment**

|                                               |   | 2007   |       |   | 2006   |   |
|----------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                               |
| Land                                               |   | $      | 1,327,621  |   |   | $      | 875,096 |   |
| Buildings                                          |   |   | 2,058,695  |   |   |   | 1,790,720 |   |
| Assets                recorded under capital lease |   |   | 2,892,702  |   |   |   | 2,892,702 |   |
| Leasehold                and building improvements |   |   | 1,888,618  |   |   |   | 1,908,861 |   |
| Furniture,                fixtures and equipment   |   |   | 5,663,105  |   |   |   | 5,245,108 |   |
|                                               |   |   | 13,830,741 |   |   |   | 12,712,487 |   |
| Less                accumulated depreciation       |   |   | 6,285,311  |   |   |   | 5,396,606 |   |
| Net                premises and equipment          |   | $      | 7,545,430  |   |   | $      | 7,315,881 |   |

----

**5.   Acquired      Assets**

|                                                                                                                |   | 2007   |   |   | 2006   |   |
|---------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                                                                |   |
| Real                estate properties acquired in settlement of loans and other acquired                assets |   | $      | -      |   |   | $      | 12,000 |   |
| Less                allowance for losses                                                                            |   |   | -      |   |   |   | 1,616 |   |
|                                                                                                                |   |
|                                                                                                                |   | $      | -      |   |   | $      | 10,384 |   |

|                                                   |   | 2007   |   |   | 2006   |   |    | 2005   |   |
|--------------------------------------------------------|--------|--------|--------|--------|--------|--------|---------|--------|--------|
|                                                   |   |
| Balance                at beginning of year            |   | $      | 1,616  |   |   | $      | 20,666  |   |   | $ | 13,007 |   |
| Provision                for losses on acquired assets |   |   | 6,384  |   |   |   | 2,500   |   |   |   | 20,000 |   |
| Write-downs                                            |   |   | (8,000 | )      |   |   | (21,550 | )      |   |   | (12,341 | ) |
|                                                   |   |
| Balance                at end of year                  |   | $      | -      |   |   | $      | 1,616   |   |   | $ | 20,666 |   |

**6.   **Acquisition      of Insurance Agencies****

----

|                                         |   | Palmer   |      |   | Sturtevant and                Ham |   |    | Southern Maine |   |   | Russell   |   |   | Totals |    |
|----------------------------------------------|--------|----------|-----------|--------|----------------------------------------|--------|---------|---------------------|--------|--------|-----------|--------|--------|--------|---------|
| Purchase                price                |   |     |      |   |                                   |   |    |                |   |   |      |   |   |   |    |
| 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   |   |   |   |    |   |

**7.   Deposits**

|                                                                                   |                           | WeightedAverage                Rateat                June 30, |   |         |                      2007  |        |        |                       2006 |
|----------------------------------------------------------------------------------------|--------------------------------|---------------------------------------------------------------|--------|--------------|----------------------------------------------------------|-------------|-------------|----------------------------------------------------------|
|                                                                                   | 2007                 |                                                          |   | Amount  |                                                     |        |        | Percent                                        |   |   | Amount   |   |   | Percent   |
|                                                                                   |                           |                                                          |   |         |                                                     |        |        |                                                     |   |   |   |   |   |   |   |   |   |   |
| Demand                                                                                 | 0.00                           | %                                                             |   | $            | 36,332,604                                               |        |        |                                                     | 10.0 | % |   | $ | 38,137,357 |   |   |   | 9.6 | % |
| NOW                                                                                    | 2.22                           | %                                                             |   |         | 53,405,241                                               |        |        |                                                     | 14.7 | % |   |   | 54,432,157 |   |   |   | 13.8 | % |
| Money                market                                                            | 2.35                           | %                                                             |   |         | 8,053,552                                                |        |        |                                                     | 2.2 | % |   |   | 9,430,378 |   |   |   | 2.4 | % |
| Regular                savings                                                         | 0.78                           | %                                                             |   |         | 21,145,567                                               |        |        |                                                     | 5.8 | % |   |   | 24,247,324 |   |   |   | 6.1 | % |
| Certificates                of deposit and brokered                time deposits: |                           |                                                          |   |         |                                                     |        |        |                                                     |   |   |   |   |   |   |   |   |   |   |
|                                                                                   | Less                than 1.00% | 0.75                                                          | %      |         |                                                     | 151,674     |        |                                                     |   | 0.0 | % |   |   | 150,855 |   |   |   | 0.0 | % |
|                                                                                   | 1.00-3.75%                     | 3.46                                                          | %      |         |                                                     | 9,973,634   |        |                                                     |   | 2.7 | % |   |   | 56,262,927 |   |   |   | 14.2 | % |
|                                                                                   | 3.76-5.75%                     | 4.94                                                          | %      |         |                                                     | 235,151,508 |        |                                                     |   | 64.5 | % |   |   | 212,373,529 |   |   |   | 53.8 | % |
|                                                                                   | 5.76-7.75%                     | 6.17                                                          | %      |         |                                                     | 339,997     |        |                                                     |   | 0.1 | % |   |   | 258,850 |   |   |   | 0.1 | % |
|                                                                                   |
|                                                                                   |                           |                                                          | 4.12   | %            |                                                     | $           | 364,553,777 |                                                     |   |   | 100.0 | % |   | $ | 395,293,377 |   |   |   | 100.0 | % |

|                                  |       | 2008   |        |        | 2009   |   |       | 2010       |   |   | 2011       |       |   | 2012   |      |      | Thereafter |   |
|---------------------------------------|------------|--------|-------------|-------------|--------|--------|------------|------------|--------|--------|------------|------------|--------|--------|-----------|-----------|------------|--------|
| Less                  than 1.00% |       | $      | 151,674     |        |   | $      | -          |       |   | $      | -          |       |   | $      | -         |      |       | $      | - |   |   | $ | - |   |
|                                  | 1.00-3.75% |   |        | 7,163,772   |   |   |       | 2,735,068  |   |   |       | 74,794     |   |   |      | -         |       |   |   | - |   |   |   | - |   |
|                                  | 3.76-5.75% |   |        | 196,830,663 |   |   |       | 21,866,789 |   |   |       | 11,579,940 |   |   |      | 2,501,660 |       |   |   | 2,051,349 |   |   |   | 321,107 |   |
|                                  | 5.76-7.75% |   |        | 298,492     |   |   |       | 9,185      |   |   |       | -          |   |   |      | 32,320    |       |   |   | - |   |   |   | - |   |
|                                  |       |   |        |        |   |   |       |       |   |   |       |       |   |   |      |      |       |   |   |   |   |   |   |   |   |
| Total                                 |       | $      | 204,444,601 |        |   | $      | 24,611,042 |       |   | $      | 11,654,734 |       |   | $      | 2,533,980 |      |       | $      | 2,051,349 |   |   | $ | 321,107 |   |

----

|                                                              |   | 2007   |       |   | 2006   |   |       | 2005   |   |
|-------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
|                                                              |   |
| NOW                                                               |   | $      | 1,234,207  |   |   | $      | 1,065,675  |   |   | $ | 808,762 |   |
| Money                market                                       |   |   | 221,118    |   |   |   | 246,283    |   |   |   | 212,744 |   |
| Regular                savings                                    |   |   | 194,258    |   |   |   | 227,830    |   |   |   | 230,201 |   |
| Certificates                of deposit and brokered time deposits |   |   | 11,840,590 |   |   |   | 9,612,518  |   |   |   | 7,373,091 |   |
|                                                              |   |   |       |   |   |   |       |   |   |   |   |   |
|                                                              |   | $      | 13,490,173 |   |   | $      | 11,152,306 |   |   | $ | 8,624,798 |   |

**8.   Borrowings**

*Federal      Home Loan Bank*

|                  |   | 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           |   |                                                          |   |                                  |
|                  |
|                  |   | June                30, 2006              |   |                                  |
| PrincipalAmounts      |   | Interest Rates                                      |   | Maturity  Dates   |
|                  |
| $34,831,900           |   | 2.22%                - 5.31%                             |   | 2007                                  |
|  31,056,698      |   | 2.68                  -  5.68        |   | 2008                                  |
|   5,000,000 |   | 4.88                                                |   | 2009                                  |
|   5,000,000 |   | 4.81   -                 4.99   |   | 2011                                  |
|                  |   |                                                          |   |                                  |
| $75,888,598      |   |                                                          |   |                                  |

*Other      borrowings*

|                                             |   | June                30, 2007    |   |                                  |
|--------------------------------------------------|--------|------------------------------------------------|--------|---------------------------------------|
| Principal Amounts                           |   | 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                  |   |                                           |   |                                  |
|                                             |   |                                           |   |                                  |

----

*Capital      Lease Obligations*

| 2008                                                                                               |   | $      | 264,262   |   |
|----------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|
| 2009                                                                                               |   |   | 264,262   |   |
| 2010                                                                                               |   |   | 264,262   |   |
| 2011                                                                                               |   |   | 264,262   |   |
| 2012                                                                                               |   |   | 264,262   |   |
| 2013                and thereafter                                                                 |   |   | 2,344,740 |   |
|                        Total minimuim lease payments  |   |   | 3,666,050 |   |
|                         Less imputed interest    |   |   | 1,012,539 |   |
|                                                                                               |   |   |      |   |
|                         Capital lease obligation |   | $      | 2,653,511 |   |

*Fed      Discount Window Borrower-in-Custody Program*

*Short-Term      Borrowings*

**9.  Capital      and Regulatory Matters**

----

|                                                                            |   | Actual |   |   For                CapitalAdequacy                Purposes |   | To                Be "WellCapitalized"                UnderPrompt                CorrectiveAction                Provisions |
|---------------------------------------------------------------------------------|--------|--------|--------|------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------|
|                                                                            |   | Amount |   |                                                                   | Ratio  |                                                                                                                        | Amount |   | Ratio |   | Amount |   | Ratio |
|                                                                            |   |   |   |                                                                   |   |                                                                                                                        |  (Dollars                in Thousands)  |   |   |   |   |
| **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% |
|                                                                            |
| **As                of June 30, 2006:**                                         |   |   |   |                                                                   |   |                                                                                                                        |   |   |   |   |   |   |   |   |   |
| Northeast                Bancorp:                                               |   |   |   |                                                                   |   |                                                                                                                        |   |   |   |   |   |   |   |   |   |
| Total                capital to risk  weighted                assets  |   | $      | 60,940 |                                                                   |   |                                                                                                                        | 14.52% |   |  >$33,585 |   |  >8.0% |   |  >$41,981 |   |  >10.0% |
| Tier                1 capital to risk  weighted                assets |   | $      | 52,252 |                                                                   |   |                                                                                                                        | 12.45% |   |  >$16,793 |   |  >4.0% |   |  >$25,189 |   |  > 6.0% |
| Tier                1 capital to total  average                assets |   | $      | 52,252 |                                                                   |   |                                                                                                                        | 9.32% |   |  >$22,437 |   |  >4.0% |   |  >$28,047 |   |  > 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, 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% |
|                                                                            |
| **As                of June 30, 2006:**                                         |   |         |   |                                                                   |   |                                                                                                                        |   |   |   |   |   |   |   |   |   |
| Northeast                Bank:                                                  |   |         |   |                                                                   |   |                                                                                                                        |   |   |   |   |   |   |   |   |   |
| Total                capital to risk  weighted                assets  |   | $            | 56,088 |                                                                   |   |                                                                                                                        | 13.44% |   |  >$33,395 |   |  >8.0% |   |  >$41,743 |   |  >10.0% |
| Tier                1 capital to risk  weighted                assets |   | $            | 50,864 |                                                                   |   |                                                                                                                        | 12.18% |   |  >$16,697 |   |  >4.0% |   |  >$25,046 |   |  > 6.0% |
| Tier                1 capital to total  average                assets |   | $            | 50,864 |                                                                   |   |                                                                                                                        | 9.07% |   |  >$22,426 |   |  >4.0% |   |  >$28,032 |   |  > 5.0% |

----

**10.  Earnings      Per Common Share**

|                                                                                               |   | 2007   |      |   | 2006   |   |      | 2005   |   |
|----------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
|                                                                                               |   |
| Average                shares outstanding, used in computing Basic EPS                             |   |   | 2,451,610 |   |   |   | 2,493,560 |   |   |   | 2,518,764 |   |
|                                                                                               |   |   |      |   |   |   |      |   |   |   |   |   |
| Effect                of Dilutive Securities:                                                      |   |   |      |   |   |   |      |   |   |   |   |   |
|    Stock                and options outstanding                                     |   |   | 18,905    |   |   |   | 23,456    |   |   |   | 28,681 |   |
|    Options                exercised or canceled                                     |   |   | 47        |   |   |   | 9,079     |   |   |   | 16,100 |   |
| Average                equivalent shares outstanding, used in computing Diluted                EPS |   |   | 2,470,562 |   |   |   | 2,526,095 |   |   |   | 2,563,545 |   |

**11.  Other      Expenses**

|                                                       |   | 2007   |      |   | 2006   |   |      | 2005   |   |
|------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
|                                                       |   |   |      |   |   |   |      |   |   |
| Professional                fees                           |   | $      | 639,821   |   |   | $      | 620,914   |   |   | $ | 658,334 |   |
| Advertising                expense                         |   |   | 440,222   |   |   |   | 491,920   |   |   |   | 336,201 |   |
| Write-down                of non-marketable securities     |   |   | 248,482   |   |   |   | 42,257    |   |   |   | 96,931 |   |
| Computer                services and processing costs      |   |   | 616,173   |   |   |   | 580,995   |   |   |   | 472,154 |   |
| Loan                expense                                |   |   | 402,936   |   |   |   | 342,586   |   |   |   | 401,126 |   |
| Write-down                of available-for-sale securities |   |   | 50,442    |   |   |   | 38,394    |   |   |   | 27,849 |   |
| Other                                                      |   |   | 2,086,832 |   |   |   | 2,099,909 |   |   |   | 2,358,757 |   |
|                                                       |   |   |      |   |   |   |      |   |   |   |   |   |
|                                                       |   | $      | 4,484,908 |   |   | $      | 4,216,975 |   |   | $ | 4,351,352 |   |

----

**12.  Income      Taxes**

|                                     |   | 2007   |     |   | 2006   |   |      | 2005   |   |
|------------------------------------------|--------|--------|----------|--------|--------|--------|-----------|--------|--------|
| Federal:                                 |   |   |     |   |   |   |      |   |   |
|                   Current      |   | $      | 845,509  |   |   | $      | 2,089,538 |   |   | $ | 1,965,463 |   |
|                   Deferred     |   |   | (329,268 | )      |   |   | (323,220  | )      |   |   | (197,522 | ) |
|                                     |   |   |     |   |   |   |      |   |   |   |   |   |
|                                     |   |   | 516,241  |   |   |   | 1,766,318 |   |   |   | 1,767,941 |   |
|                                     |   |   |     |   |   |   |      |   |   |   |   |   |
| State                and local - current |   |   | 62,922   |   |   |   | 85,049    |   |   |   | 85,916 |   |
|                                     |   |   |     |   |   |   |      |   |   |   |   |   |
|                                     |   | $      | 579,163  |   |   | $      | 1,851,367 |   |   | $ | 1,853,857 |   |

|                                                           |   | 2007   |     |   | 2006                            |   |   | 2005   |   |
|----------------------------------------------------------------|--------|--------|----------|--------|---------------------------------|--------|--------|--------|--------|
|                                                           |   | Amount |     |   | %                ofPretaxIncome |   |   | Amount |   |   | %                ofPretaxIncome |   |   | Amount |   |   | %                ofPretaxIncome |   |
| Expected                income tax expense at federal tax rate |   | $      | 838,386  |   |                            |   | 34.0   | %      |   | $ | 1,990,892 |   |   |   | 34.0 | % |   | $ | 1,996,646 |   |   |   | 34.0 | % |
| State                tax, net of federal tax benefit      |   |   | 41,529   |   |                            |   | 1.7    |   |   |   | 56,132 |   |   |   | 1.0 |   |   |   | 56,705 |   |   |   | 1.0 |   |
| Dividend                received deduction                |   |   | (33,547  | )      |                            |   | (1.4   | )      |   |   | (30,634 | ) |   |   | (0.5 | ) |   |   | (34,310 | ) |   |   | (0.6 | ) |
| Non-taxable                interest income                     |   |   | (143,938 | )      |                            |   | (5.8   | )      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Non-taxable                BOLI income                         |   |   | (118,748 | )      |                            |   | (4.8   | )      |   |   | (112,829 | ) |   |   | (1.9 | ) |   |   | (93,278 | ) |   |   | (1.6 | ) |
| Other                                                          |   |   | (4,519   | )      |                            |   | (0.2   | )      |   |   | (52,194 | ) |   |   | (0.9 | ) |   |   | (71,906 | ) |   |   | (1.3 | ) |
|                                                           |   |   |     |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   | $      | 579,163  |   |                            |   | 23.5   | %      |   | $ | 1,851,367 |   |   |   | 31.7 | % |   | $ | 1,853,857 |   |   |   | 31.5 | % |

|                                                                                                                                               |   | 2007   |      |   | 2006   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Deferred                tax assets:                                                                                                                |   |   |      |   |   |   |
|                  Loans, principally due to allowance for loan losses                                                                          |   | $      | 2,018,000 |   |   | $      | 1,882,000 |   |
|                  Interest on nonperforming loans                                                                                              |   |   | 72,000    |   |   |   | 54,000 |   |
|                  Difference in tax and federal statement basis of                investments                                                  |   |   | 1,125,000 |   |   |   | 1,444,000 |   |
|                  Deferred compensation                                                                                                        |   |   | 263,000   |   |   |   | 169,000 |   |
|                  Other                                                                                                                        |   |   | 110,000   |   |   |   | 156,000 |   |
|                                                                                                                                               |   |   |      |   |   |   |   |   |
|                  Total deferred tax assets                                                                                                    |   |   | 3,588,000 |   |   |   | 3,705,000 |   |
|                                                                                                                                               |   |   |      |   |   |   |   |   |
| Deferred                tax liabilities:                                                                                                           |   |   |      |   |   |   |   |   |
|                  Difference in tax and financial statement amortization of goodwill                and                other intangible assets |   |   | (324,000  | )      |   |   | (138,000 | ) |
|                  Mortgage servicing rights                                                                                                    |   |   | (69,000   | )      |   |   | (110,000 | ) |
|                  Premises and equipment                                                                                                       |   |   | (193,000  | )      |   |   | (229,000 | ) |
|                  Prepaid expenses                                                                                                             |   |   | (159,000  | )      |   |   | (143,000 | ) |
|                  Other                                                                                                                        |   |   | -         |   |   |   | (3,000 | ) |
|                                                                                                                                               |   |   |      |   |   |   |   |   |
|                  Total deferred tax liabilities                                                                                               |   |   | (745,000  | )      |   |   | (623,000 | ) |
|                                                                                                                                               |   |   |      |   |   |   |   |   |
|                  Net deferred tax asset, included in other assets                                                                             |   | $      | 2,843,000 |   |   | $      | 3,082,000 |   |

----

**13.  Employee      Benefit Plans**

*401(k)      Plan*

*Stock      Option Plans*

|                                                                          |   | 2007   |   |   | 2006                                |   |   | 2005   |   |
|-------------------------------------------------------------------------------|--------|--------|--------|--------|-------------------------------------|--------|--------|--------|--------|
|                                                                          |   | Shares |   |   | Weighted-AverageExercise Price |   |   | Shares |   |   | Weighted-AverageExercise Price |   |   | Shares |   |   | Weighted-AverageExercise Price |   |
| Outstanding                at beginning of year                               |   |   | 52,500 |   |                                | $      | 12.13  |   |   |   | 71,500 |   |   | $ | 12.31 |   |   |   | 108,875 |   |   | $ | 11.79 |   |
| Granted                                                                       |   |   | -      |   |                                |   | -      |   |   |   | - |   |   |   | - |   |   |   | 1,000 |   |   |   | 12.75 |   |
| Exercised                                                                     |   |   | (500   | )      |                                |   | 13.10  |   |   |   | (17,500 | ) |   |   | 12.23 |   |   |   | (37,875 | ) |   |   | 11.18 |   |
| Expired                                                                       |   |   | -      |   |                                |   | -      |   |   |   | (1,500 | ) |   |   | 14.90 |   |   |   | (500 | ) |   |   | 18.50 |   |
| Outstanding                and exercisable at                end of year |   |   | 52,000 |   |                                | $      | 12.12  |   |   |   | 52,500 |   |   | $ | 12.13 |   |   |   | 71,500 |   |   | $ | 12.31 |   |

|                                                  |   |                                                                  |   | Options                Outstanding and Exercisable                     |
|-------------------------------------------------------|--------|-----------------------------------------------------------------------|--------|------------------------------------------------------------------------|
| Range                ofExercise                Prices |   | NumberOutstanding                at June                30, 2007 |   | Weighted-AverageRemaining Contractual                Life (Years) |   | Weighted-Average Exercise                Price |
| $8.00                to $9.00                         |   |                                                                  | 25,000 |                                                                   |   |  2.7 |   |   | $                 8.47   |    |
| $13.10                                                |   |                                                                  | 15,000 |                                                                   |   | 4.1 |   |   | 13.10 |   |
| $18.50                                                |   |                                                                  | 12,000 |                                                                   |   | 0.6 |   |   | 18.50 |   |
|                                                  |   |                                                                  |   |                                                                   |   |   |   |   |   |   |
| $8.00                to $18.50                        |   |                                                                  | 52,000 |                                                                   |   | 2.6 |   |   | $12.12  |   |

----

**14.  Commitments,      Contingent Liabilities and Other Off-Balance Sheet      Risks**

|                                                                                                                             |   | 2007   |       |   | 2006   |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                                                                                                             |   |   |       |   |   |   |
| Commitments                to originate loans:                                                                                   |   |   |       |   |   |   |
|                   Residential real estate mortgages                                                                    |   | $      | 5,936,000  |   |   | $      | 5,810,000 |   |
|                   Residential real estate mortgages held for sale                                                      |   |   | 2,557,000  |   |   |   | 1,393,000 |   |
|                   Commercial real estate mortgages, including multi-family residential                real estate |   |   | 395,000    |   |   |   | 10,985,000 |   |
|                   Commercial business loans                                                                            |   |   | 3,672,000  |   |   |   | 1,377,000 |   |
|                                                                                                                             |   |   |       |   |   |   |   |   |
|                                                                                                                             |   | $      | 12,560,000 |   |   | $      | 19,565,000 |   |
|                                                                                                                             |   |   |       |   |   |   |   |   |
| Unused                lines of credit                                                                                            |   | $      | 42,745,000 |   |   | $      | 41,130,000 |   |
| Standby                letters of credit                                                                                         |   |   | 696,000    |   |   |   | 1,538,000 |   |
| Unadvanced                portions of construction loans                                                                         |   |   | 2,257,000  |   |   |   | 2,375,000 |   |

*Lease      Obligations*

| 2008                               | $    379,059 |
|------------------------------------|----------------------------------|
| 2009                               | 323,512                          |
| 2010                               | 299,321                          |
| 2011                               | 233,434                          |
| 2012                               | 232,910                          |
| 2013                and thereafter | 458,339                          |
|                               |                             |
|                               | $                1,926,575       |

----

*Legal      Proceedings*

**15.  Condensed      Parent Information**

| Balance                Sheets                                             |   | June                30, |       |
|---------------------------------------------------------------------------|--------|-------------------------|------------|
| Assets                                                                    |   | 2007                    |       |   | 2006 |   |
|                                                                      |   |                    |       |   |   |   |
| Cash                                                                      |   | $                       | 1,339,286  |   |   | $ | 615,784 |   |
| Available-for-sale                securities                              |   |                    | 565,516    |   |   |   | 833,971 |   |
| Investment                in banking subsidiary                           |   |                    | 51,464,689 |   |   |   | 50,194,825 |   |
| Investment                in common securities of affiliated trusts       |   |                    | 496,000    |   |   |   | 496,000 |   |
| Goodwill,                net                                              |   |                    | 407,897    |   |   |   | 407,897 |   |
| Other                assets                                               |   |                    | 3,213,580  |   |   |   | 3,127,862 |   |
|                                                                      |   |                    |       |   |   |   |   |   |
| Total                assets                                               |   | $                       | 57,486,968 |   |   | $ | 55,676,339 |   |
|                                                                      |   |                    |       |   |   |   |   |   |
| Liabilities                and Stockholders' Equity                       |   |                    |       |   |   |   |   |   |
|                                                                      |   |                    |       |   |   |   |   |   |
| Junior                Subordinated Debentures issued to affiliated trusts |   | $                       | 16,496,000 |   |   | $ | 16,496,000 |   |
| Other                liabilities                                          |   |                    | 141,090    |   |   |   | 84,214 |   |
|                                                                      |   |                    |       |   |   |   |   |   |
|                                                                      |   |                    | 16,637,090 |   |   |   | 16,580,214 |   |
|                                                                      |   |                    |       |   |   |   |   |   |
| Stockholders'                equity                                       |   |                    | 40,849,878 |   |   |   | 39,096,125 |   |
|                                                                      |   |                    |       |   |   |   |   |   |
| Total                liabilities and stockholders' equity                 |   | $                       | 57,486,968 |   |   | $ | 55,676,339 |   |

| Statements                of Income                                                                                             |   |
|---------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                            |   | Years                Ended June 30, |   |
|                                                                                                                            |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Income:                                                                                                                         |   |   |   |   |   |   |   |   |   |
| Dividends                from banking subsidiary                                                                                |   | $ | 2,500,000 |   |   | $ | 1,250,000 |   |   | $ | 300,000 |   |
| Other                income                                                                                                     |   |   | 233,814 |   |   |   | 147,233 |   |   |   | 175,715 |   |
|                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                income                                                                                                     |   |   | 2,733,814 |   |   |   | 1,397,233 |   |   |   | 475,715 |   |
|                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses:                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                on Junior Subordinated Debentures paid to                affiliated trusts                         |   |   | 1,080,538 |   |   |   | 1,063,681 |   |   |   | 1,087,696 |   |
| General                and administrative expenses                                                                              |   |   | 372,513 |   |   |   | 151,421 |   |   |   | 610,330 |   |
|                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                expenses                                                                                                   |   |   | 1,453,051 |   |   |   | 1,215,102 |   |   |   | 1,698,026 |   |
|                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                (loss) before income tax benefit and equity in                undistributed net income of subsidiary |   |   | 1,280,763 |   |   |   | 182,131 |   |   |   | (1,222,311 | ) |
|                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                tax benefit                                                                                               |   |   | 427,997 |   |   |   | 367,542 |   |   |   | 602,665 |   |
|                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                (loss) before equity in undistributed net income                of subsidiary                        |   |   | 1,708,760 |   |   |   | 549,673 |   |   |   | (619,646 | ) |
|                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity                in undistributed net income of subsidiary                                                                 |   |   | 177,917 |   |   |   | 3,454,526 |   |   |   | 4,638,280 |   |
|                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                income                                                                                                       |   | $ | 1,886,677 |   |   | $ | 4,004,199 |   |   | $ | 4,018,634 |   |

----

|                                                                                                                        |   | Years                Ended June 30, |       |
|-----------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|------------|
| Statements                of Cash Flows                                                                                     |   | 2007                                |       |   | 2006 |   |   | 2005 |   |
| Cash                flows from operating activities:                                                                        |   |                                |       |   |   |   |   |   |   |
| Net                income                                                                                                   |   | $                                   | 1,886,677  |   |   | $ | 4,004,199 |   |   | $ | 4,018,634 |   |
| Adjustments                to reconcile net income to net cash provided                (used) by operating activities: |   |                                |       |   |   |   |   |   |   |   |   |   |
| Amortization                                                                                                                |   |                                | 24,000     |   |   |   | 24,000 |   |   |   | 47,170 |   |
| Undistributed                earnings of subsidiary                                                                         |   |                                | (177,917   | ) |   |   | (3,454,526 | ) |   |   | (4,638,280 | ) |
| Write                down on available-for-sale securities                                                                  |   |                                | 50,442     |   |   |   | 33,404 |   |   |   | 27,849 |   |
| Net                gain on available-for-sale securities                                                                    |   |                                | (43,513    | ) |   |   | (17,693 | ) |   |   | (64,174 | ) |
| Other                                                                                                                       |   |                                | -          |   |   |   | - |   |   |   | 7,783 |   |
| Writedown                of non-marketable investments                                                                      |   |                                | 248,482    |   |   |   | 42,257 |   |   |   | 96,931 |   |
| Increase                in other assets                                                                                     |   |                                | (366,431   | ) |   |   | (272,411 | ) |   |   | (980,600 | ) |
| Increase                in other liabilities                                                                                |   |                                | 56,876     |   |   |   | 9,934 |   |   |   | 73,386 |   |
|                                                                                                                        |   |                                |       |   |   |   |   |   |   |   |   |   |
| Net                cash provided (used) by operating activities                                                             |   |                                | 1,678,616  |   |   |   | 369,164 |   |   |   | (1,411,301 | ) |
|                                                                                                                        |   |                                |       |   |   |   |   |   |   |   |   |   |
| Cash                flows from investing activities:                                                                        |   |                                |       |   |   |   |   |   |   |   |   |   |
| Purchase                of common securities of affiliated trusts                                                           |   |                                | -          |   |   |   | - |   |   |   | (310,000 | ) |
| Increase                in investment of bank subsidiary                                                                    |   |                                | (400,000   | ) |   |   | - |   |   |   | (1,800,000 | ) |
| Proceeds                from the sales of securities of affiliated trusts                                                   |   |                                | -          |   |   |   | - |   |   |   | 221,851 |   |
| Available-for-sale                securities transferred from the bank                                                      |   |                                | -          |   |   |   | - |   |   |   | (669,045 | ) |
| Purchases                of available-for-sale securities                                                                   |   |                                | (1,964,213 | ) |   |   | (1,063,076 | ) |   |   | (733,351 | ) |
| Proceeds                from sales of available-for-sale securities                                                         |   |                                | 2,249,946  |   |   |   | 855,635 |   |   |   | 748,615 |   |
|                                                                                                                        |   |                                |       |   |   |   |   |   |   |   |   |   |
| Net                cash used by investing activities                                                                        |   |                                | (114,267   | ) |   |   | (207,441 | ) |   |   | (2,541,930 | ) |
|                                                                                                                        |   |                                |       |   |   |   |   |   |   |   |   |   |
| Cash                flows from financing activities:                                                                        |   |                                |       |   |   |   |   |   |   |   |   |   |
| Issuance                of common stock                                                                                     |   |                                | 6,550      |   |   |   | 213,972 |   |   |   | 280,170 |   |
| Common                stock issued in connection with the purchase of branch                real estate                |   |                                | 103,000    |   |   |   | - |   |   |   | - |   |
| Repayment                of junior subordinate debentures                                                                   |   |                                | -          |   |   |   | - |   |   |   | (7,394,849 | ) |
| Company                stock purchased                                                                                      |   |                                | (67,944    | ) |   |   | (2,142,250 | ) |   |   | (698,812 | ) |
| Dividends                paid to stockholders                                                                               |   |                                | (882,453   | ) |   |   | (897,087 | ) |   |   | (910,220 | ) |
| Proceeds                from issuance of junior subordinated debentures                to affiliated trusts            |   |                                | -          |   |   |   | - |   |   |   | 10,310,000 |   |
|                                                                                                                        |   |                                |       |   |   |   |   |   |   |   |   |   |
| Net                cash (used) provided by financing activities                                                             |   |                                | (840,847   | ) |   |   | (2,825,365 | ) |   |   | 1,586,289 |   |
|                                                                                                                        |   |                                |       |   |   |   |   |   |   |   |   |   |
| Net                increase (decrease) in cash                                                                              |   |                                | 723,502    |   |   |   | (2,663,642 | ) |   |   | (2,366,942 | ) |
|                                                                                                                        |   |                                |       |   |   |   |   |   |   |   |   |   |
| Cash,                beginning of year                                                                                      |   |                                | 615,784    |   |   |   | 3,279,426 |   |   |   | 5,646,368 |   |
|                                                                                                                        |   |                                |       |   |   |   |   |   |   |   |   |   |
| Cash,                end of year                                                                                            |   | $                                   | 1,339,286  |   |   | $ | 615,784 |   |   | $ | 3,279,426 |   |
|                                                                                                                        |   |                                |       |   |   |   |   |   |   |   |   |   |
| Supplemental                schedule of cash flow information:                                                              |   |                                |       |   |   |   |   |   |   |   |   |   |
| Interest                paid                                                                                                |   | $                                   | 1,067,097  |   |   | $ | 1,039,681 |   |   | $ | 1,087,696 |   |

**16.  Other      Comprehensive Income (Loss)**

|                                                                                                                                                            | 2007   |    |   | 2006   |   |       | 2005   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|--------|--------|--------|------------|--------|--------|
|  Unrealized              gains (losses) arising during the period, net of              tax effect of $(361,936) in 2007,                              |   |    |   |   |   |       |   |   |   |   |   |
|                   $997,265 in 2006 and                $(339,093) in 2005                                                                         | $      | 702,582 |   |   | $      | (1,935,868 | )      |   | $ | 658,431 |   |
|                                                                                                                                                            |   |    |   |   |   |       |   |   |   |   |   |
| Reclassification              adjustment for losses (gains) on investments,              net of write-downs,included                                  |   |    |   |   |   |       |   |   |   |   |   |
|                   in net income, net                of tax effect of $(2,753) in 2007, $8,456 in 2006, and $(35,311)                in 2005 |   | 5,341   |   |   |   | 16,414     |   |   |   | (68,350 | ) |
|                                                                                                                                                            |   |    |   |   |   |       |   |   |   |   |   |
| Other                comprehensive income (loss)                                                                                                                | $      | 707,923 |   |   | $      | (1,952,282 | )      |   | $ | 726,781 |   |

----

**17.  Segment      Reporting**

**18.  Junior      Subordinated Debentures**

| 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                                                                                   |              | 8.16%                           |        | 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 |                                 | 6.42%  |                                             |   |

**19.  Fair      Value of Financial Instruments**

*Cash      and Cash Equivalents*

*Available-for-sale      Securities*

*Federal      Home Loan Bank and Federal Reserve Bank Stock*

*Loans      and Loans held-for-sale*

----

*Interest      Receivable*

*Deposits*

*Borrowings*

*Junior      Subordinated Debentures*

*Commitments      to Originate Loans*

*Limitations*

----

|                                              |   | June                30, 2007          |    |   | June                30, 2006       |   |
|---------------------------------------------------|--------|---------------------------------------|---------|--------|------------------------------------|--------|
|                                              |   | Carrying Value                   |    |   | EstimatedFair                Value |   |   | Carrying Value |   |   | EstimatedFair                Value |   |
|                                              |   | (Dollars                in Thousands) |    |
| Financial                assets:                  |   |                                  |    |   |                               |   |   |   |   |   |   |   |
| Cash                and cash equivalents          |   | $                                     | 10,742  |   |                               | $      | 10,742 |   |   | $ | 12,104 |   |   | $ | 12,104 |   |
| Available-for-sale                securities      |   |                                  | 86,348  |   |                               |   | 86,348 |   |   |   | 86,138 |   |   |   | 86,138 |   |
| Regulatory                stock (FHLB and FRB)    |   |                                  | 5,297   |   |                               |   | 5,297 |   |   |   | 5,958 |   |   |   | 5,958 |   |
| Loans                held-for-sale                |   |                                  | 1,636   |   |                               |   | 1,665 |   |   |   | 681 |   |   |   | 703 |   |
| Loans,                net                         |   |                                  | 419,815 |   |                               |   | 422,596 |   |   |   | 430,167 |   |   |   | 437,196 |   |
| Interest                receivable                |   |                                  | 2,587   |   |                               |   | 2,587 |   |   |   | 2,679 |   |   |   | 2,679 |   |
|                                              |   |                                  |    |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Financial                liabilities:             |   |                                  |    |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                (with no stated maturity) |   |                                  | 118,937 |   |                               |   | 118,937 |   |   |   | 126,247 |   |   |   | 126,247 |   |
| Time                deposits                      |   |                                  | 245,617 |   |                               |   | 245,009 |   |   |   | 269,046 |   |   |   | 266,685 |   |
| Federal                Home Loan Bank advances    |   |                                  | 93,017  |   |                               |   | 92,625 |   |   |   | 75,889 |   |   |   | 75,457 |   |
| Other                borrowings                   |   |                                  | 2,292   |   |                               |   | 2,292 |   |   |   | 57 |   |   |   | 57 |   |
| Short-term                borrowings              |   |                                  | 33,105  |   |                               |   | 33,045 |   |   |   | 29,637 |   |   |   | 29,587 |   |
| Capital                lease obligation           |   |                                  | 2,654   |   |                               |   | 2,557 |   |   |   | 2,781 |   |   |   | 2,656 |   |
| Junior                Subordinated Debentures     |   |                                  | 16,496  |   |                               |   | 16,064 |   |   |   | 16,496 |   |   |   | 15,034 |   |

**20.  Branch      Acquisition**

**21.  Subsequent      Events**

----

| **Item                  8.b. Statistical Disclosures Required by Industry Guide                  3**                                                        |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|---------|--------|------------------------------------|--------|--------|------------------------------------|--------|--------|---------|--------|--------|----------|---------|--------|---------|
|                                                                                                                                                                  |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |
| **Table                  1**                                                                                                                                          |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |
| Northeast                  Bancorp Consolidated                                                                                                                       |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |
| Distribution                  of Assets, Liabilities and Stockholders' Equity ($ in                  thousands)          |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |
| Interest                  Rates and Interest Differential                                                                                                             |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |
| Years                  Ended June 30, 2007, 2006 and 2005                                                                                                             |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |
|                                                                                                                                                                  |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  |                                                                                                                                                                                       |   | **June                  30, 2007** |    |   | **June                  30, 2006** |   |   | **June                  30, 2005** |   |
|                                                                                                                                                                  |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  |                                                                                                                                                                                       |   | 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)                                                                                                                                                 |   | $                                  | 84,705  |   |                               | $      | 3,935  |                               |   |   | 4.65    | %      |   | $        | 80,050  |   |    | $ | 3,461 |   |   |   | 4.32 | % |   | $ | 69,451 |   |   | $ | 2,715 |   |   |   | 3.91 | % |
|                                                                                                                                                                  | Loans                  (2)(3)(4)                                                                                                                                                           |   |                               | 433,576 |   |                               |   | 31,367 |                               |   |   | 7.23    | %      |   |     | 448,611 |   |    |   | 31,643 |   |   |   | 7.05 | % |   |   | 453,379 |   |   |   | 29,619 |   |   |   | 6.53 | % |
|                                                                                                                                                                  | Regulatory                  stock                                                                                                                                                          |   |                               | 5,529   |   |                               |   | 368    |                               |   |   | 6.66    | %      |   |     | 6,919   |   |    |   | 336 |   |   |   | 4.86 | % |   |   | 6,982 |   |   |   | 265 |   |   |   | 3.80 | % |
|                                                                                                                                                                  | Short-term                investments                                                                                                                                                 |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  |                    (5)                                                                                                                                                                |   |                               | 4,380   |   |                               |   | 210    |                               |   |   | 4.79    | %      |   |     | 3,588   |   |    |   | 134 |   |   |   | 3.73 | % |   |   | 3,998 |   |   |   | 75 |   |   |   | 1.88 | % |
|  Total                interest-earning                                                                                                                           |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                   assets/interest                                                                                                                           |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                     income/average rates                                                                                                                    |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                     earned                                                                                                                                  |                                                                                                                                                                                       |   | 528,190                            |    |   |                               | 35,880 |   |                               |   | 6.79   | %       |   |   | 539,168  |    |   |    | 35,574 |   |   |   | 6.60 | % |   |   | 533,810 |   |   |   | 32,674 |   |   |   | 6.12 | % |
|                                                                                                                                                                  |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest                  earning assets:                                                                                                                         |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  | Cash                  & due from banks                                                                                                                                                 |   |                               | 6,794   |   |                               |   |   |                               |   |   |    |   |   |     | 8,845   |   |    |   |   |   |   |   |   |   |   |   | 11,948 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  | Bank                premises and                                                                                                                                                           |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  |                    equipment, net                                                                                                                                                     |   |                               | 7,345   |   |                               |   |   |                               |   |   |    |   |   |     | 7,050   |   |    |   |   |   |   |   |   |   |   |   | 4,230 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  | Other                  assets                                                                                                                                                              |   |                               | 21,705  |   |                               |   |   |                               |   |   |    |   |   |     | 19,816  |   |    |   |   |   |   |   |   |   |   |   | 18,512 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  | Allowance                for loan                                                                                                                                                          |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  |   losses                                                                                                                                                                         |   |                               | (5,728  | )      |                               |   |   |                               |   |   |    |   |   |     | (5,451  | )      |    |   |   |   |   |   |   |   |   |   | (4,862 | ) |   |   |   |   |   |   |   |   |
| Total                non-interest                                                                                                                                     |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   earning                  assets                                                                                                                           |                                                                                                                                                                                       |   | 30,116                             |    |   |                               |   |   |                               |   |   |    |   |   | 30,260   |    |   |    |   |   |   |   |   |   |   |   | 29,828 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  assets                                                                                                                                         |                                                                                                                                                                                       | $      | 558,306                            |    |   |                               |   |   |                               |   |   |    |   | $      | 569,428  |    |   |    |   |   |   |   |   |   |   | $ | 563,638 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                  & Stockholders' Equity:                                                                                |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing                  liabilities:                                                                                                                        |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  |   NOW                                                                                                                                                                            |   | $                                  | 54,667  |   |                               | $      | 1,234  |                               |   |   | 2.26    | %      |   | $        | 59,969  |   |    | $ | 1,158 |   |   |   | 1.93 | % |   | $ | 65,761 |   |   | $ | 809 |   |   |   | 1.23 | % |
|                                                                                                                                                                  |   Money                  market                                                                                                                                                  |   |                               | 9,357   |   |                               |   | 221    |                               |   |   | 2.36    | %      |   |     | 13,093  |   |    |   | 246 |   |   |   | 1.88 | % |   |   | 17,096 |   |   |   | 213 |   |   |   | 1.25 | % |
|                                                                                                                                                                  |   Savings                                                                                                                                                                        |   |                               | 22,309  |   |                               |   | 194    |                               |   |   | 0.87    | %      |   |     | 27,453  |   |    |   | 228 |   |   |   | 0.83 | % |   |   | 29,056 |   |   |   | 230 |   |   |   | 0.79 | % |
|                                                                                                                                                                  |   Time                                                                                                                                                                           |   |                               | 256,268 |   |                               |   | 11,841 |                               |   |   | 4.62    | %      |   |     | 255,599 |   |    |   | 9,520 |   |   |   | 3.72 | % |   |   | 243,612 |   |   |   | 7,373 |   |   |   | 3.03 | % |
|                                                                                                                                                                  |      Total                interest-                                                                                                                               |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  |                         bearing deposits                                                                                                                     |   |                               | 342,601 |   |                               |   | 13,490 |                               |   |   | 3.94    | %      |   |     | 356,114 |   |    |   | 11,152 |   |   |   | 3.13 | % |   |   | 355,525 |   |   |   | 8,625 |   |   |   | 2.43 | % |
|                                                                                                                                                                  | Short-term                borrowings                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  |                     (6)                                                                                                                                                          |   |                               | 36,145  |   |                               |   | 1,505  |                               |   |   | 4.16    | %      |   |     | 31,427  |   |    |   | 928 |   |   |   | 2.95 | % |   |   | 30,572 |   |   |   | 403 |   |   |   | 1.32 | % |
|                                                                                                                                                                  | Borrowed                  funds                                                                                                                                                            |   |                               | 83,024  |   |                               |   | 4,021  |                               |   |   | 4.84    | %      |   |     | 82,143  |   |    |   | 3,617 |   |   |   | 4.40 | % |   |   | 82,542 |   |   |   | 3,851 |   |   |   | 4.67 | % |
|                                                                                                                                                                  | Junior                subordinated                                                                                                                                                         |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  |                    debentures                                                                                                                                                         |   |                               | 16,496  |   |                               |   | 1,081  |                               |   |   | 6.55    | %      |   |     | 16,496  |   |    |   | 1,064 |   |   |   | 6.45 | % |   |   | 15,248 |   |   |   | 1,088 |   |   |   | 7.14 | % |
| Total                interest-bearing                                                                                                                                 |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                  liabilities/interest                                                                                                                            |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   expense/average                rates                                                                                                                      |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                    paid                                                                                                                                          |                                                                                                                                                                                       |   | 478,266                            |    |   |                               | 20,097 |   |                               |   | 4.20   | %       |   |   | 486,180  |    |   |    | 16,761 |   |   |   | 3.45 | % |   |   | 483,887 |   |   |   | 13,967 |   |   |   | 2.89 | % |
|                                                                                                                                                                  |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest                bearing                                                                                                                                   |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                     liabilities:                                                                                                                            |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  | Demand                deposits and                                                                                                                                                         |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  |   escrow                  accounts                                                                                                                                               |   |                               | 35,420  |   |                               |   |   |                               |   |   |    |   |   |     | 39,162  |   |    |   |   |   |   |   |   |   |   |   | 37,841 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  | Other                  liabilities                                                                                                                                                         |   |                               | 3,500   |   |                               |   |   |                               |   |   |    |   |   |     | 3,827   |   |    |   |   |   |   |   |   |   |   |   | 3,237 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  liabilities                                                                                                                                    |                                                                                                                                                                                       |   | 517,186                            |    |   |                               |   |   |                               |   |   |    |   |   | 529,169  |    |   |    |   |   |   |   |   |   |   |   | 524,965 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  | Stockholders'                  equity                                                                                                                                                      |   |                               | 41,120  |   |                               |   |   |                               |   |   |    |   |   |     | 40,259  |   |    |   |   |   |   |   |   |   |   |   | 38,673 |   |   |   |   |   |   |   |   |   |
| Total                liabilities and                                                                                                                             |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   stockholders'                  equity                                                                                                                     |                                                                                                                                                                                       | $      | 558,306                            |    |   |                               |   |   |                               |   |   |    |   | $      | 569,428  |    |   |    |   |   |   |   |   |   |   | $ | 563,638 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  |    Net                  interest income                                                                                                                                     |   |                               |    |   |                               | $      | 15,783 |                               |   |   |    |   |   |     |    |   |    | $ | 18,813 |   |   |   |   |   |   |   |   |   |   | $ | 18,707 |   |   |   |   |   |
|                                                                                                                                                                  |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  rate spread                                                                                                                                 |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   | 2.59   | %       |   |   |     |    |   |    |   |   |   |   | 3.15 | % |   |   |   |   |   |   |   |   |   |   | 3.23 | % |
| Net                  yield on interest earning assets (7)                                                                                                             |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   | 2.99   | %       |   |   |     |    |   |    |   |   |   |   | 3.49 | % |   |   |   |   |   |   |   |   |   |   | 3.50 | % |
|                                                                                                                                                                  |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                  |                                                                                                                                                                                       |   |                               |    |   |                               |   |   |                               |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  (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                  $998 in                  2007, $946                  in 2006, and $902 in 2005.  |   |
| (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.                                      |   |

----

| **Table                  2**                                                                  |                                                                                                                                                                                                       |   |                            |   |   |   |   |   |   |
|-----------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|--------|--------|--------|--------|--------|--------|
| Northeast                  Bancorp Consolidated                                               |                                                                                                                                                                                                       |   |                            |   |   |   |   |   |   |
| Investment                  Securities Portfolio                                              |                                                                                                                                                                                                       |   |                            |   |   |   |   |   |   |
| ($                  in thousands)                                                             |                                                                                                                                                                                                       |   |                            |   |   |   |   |   |   |
|                                                                                          |                                                                                                                                                                                                       |   |                            |   |   |   |   |   |   |   |
|                                                                                          |                                                                                                                                                                                                       |   | As                  of June 30, |   |
|                                                                                          |                                                                                                                                                                                                       |   | 2007                            |   |   | 2006   |   |   | 2005   |   |
| Available-for-sale                  (1)                                                       |                                                                                                                                                                                                       |   |                            |   |   |   |   |   |   |
|                                                                                          |                                                                                                                                                                                                       |   |                            |   |   |   |   |   |   |   |
| Debt                securities issued by U.S. Government-sponsored                enterprises |                                                                                                                                                                                                       | $      | 21,158                          |   |   | $      | 24,694 |   |   | $ | 25,762 |   |
|                                                                                          |                                                                                                                                                                                                       |   |                            |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed                  securities                                                   |                                                                                                                                                                                                       |   | 52,139                          |   |   |   | 48,126 |   |   |   | 46,154 |   |
|                                                                                          |                                                                                                                                                                                                       |   |                            |   |   |   |   |   |   |   |   |   |   |
| Municipal                  bonds                                                              |                                                                                                                                                                                                       |   | 10,709                          |   |   |   | 10,770 |   |   |   | - |   |
|                                                                                          |                                                                                                                                                                                                       |   |                            |   |   |   |   |   |   |   |   |   |   |
| Corporate                  bonds                                                              |                                                                                                                                                                                                       |   | 485                             |   |   |   | 478    |   |   |   | 493 |   |
|                                                                                          |                                                                                                                                                                                                       |   |                            |   |   |   |   |   |   |   |   |   |   |
| Equity                  securities                                                            |                                                                                                                                                                                                       |   | 1,857                           |   |   |   | 2,070  |   |   |   | 1,937 |   |
|                                                                                          |                                                                                                                                                                                                       |   |                            |   |   |   |   |   |   |   |   |   |   |
| Total                  available-for-sale (2):                                                |                                                                                                                                                                                                       | $      | 86,348                          |   |   | $      | 86,138 |   |   | $ | 74,346 |   |
|                                                                                          |                                                                                                                                                                                                       |   |                            |   |   |   |   |   |   |   |   |   |   |
| (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 $89,249 as of June 30,                  2007,                  $90,111 as of June 30, 2006 and $75,361 as of June 30,                  2005. |   |

| **Table                    3**                                                     |   |                               |   |   |                                         |   |   |                                          |   |   |                                |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|------------------------------------------------------------------------------------|--------|------------------------------------|--------|--------|----------------------------------------------|--------|--------|-----------------------------------------------|--------|--------|-------------------------------------|--------|--------|-------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Northeast                    Bancorp Consolidated                        |   |                               |   |   |                                         |   |   |                                          |   |   |                                |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment                    Maturity at Fair Value      |   |                               |   |   |                                         |   |   |                                          |   |   |                                |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| ($                    in thousands)                                                |   |                               |   |   |                                         |   |   |                                          |   |   |                                |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                               |   |                               |   |   |                                         |   |   | After                    One Year             |   |   | After                    Five Years |   |   |                    |   |   |   |   |   |   |   |   |   |   |
|                                                                               |   |                               |   |   |                                         |   |   | But                    Within                 |   |   | But                    Within       |   |   |                    |   |   |   |   |   |   |   |   |   |   |
|                                                                               |   | Within                    One Year |   |   | 5                    Years    |   |   | 10                    Years    |   |   | After                    10 Years   |   |   | Total    |   |
|                                                                               |   | Amount                             |   |   | Yield                                        |   |   | Amount                                        |   |   | Yield                               |   |   | Amount                  |   |   | Yield  |   |   | Amount |   |   | Yield  |   |   | Amount |   |   | Yield  |   |
| As                    of June 30, 2007                                             |   |                               |   |   |                                         |   |   |                                          |   |   |                                |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.                  S. Government                                                  |   |                               |   |   |                                         |   |   |                                          |   |   |                                |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  sponsored                    enterprises                                     |   | $                                  | 6,410  |   |                                         |   | 3.26   | %                                             |   | $      | 12,505                              |   |   |                    | 4.31   | %      |   | $      | 973    |   |   |   | 5.14   | %      |   | $      | 1,270  |   |   |   | 5.22 | % |   | $ | 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 | % |
|                                                                               |   |                               |   |   |                                         |   |   |                                          |   |   |                                |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                               |   |                               |   |   |                                         |   |   |                                          |   |   |                                |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                    of June 30, 2006                                             |   |                               |   |   |                                         |   |   |                                          |   |   |                                |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  U.                  S. Government                                            |   |                               |   |   |                                         |   |   |                                          |   |   |                                |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  sponsored                    enterprises                                     |   | $                                  | -      |   |                                         |   | 0.00   | %                                             |   | $      | 20,573                              |   |   |                    | 3.35   | %      |   | $      | 2,868  |   |   |   | 4.85   | %      |   | $      | 1,253  |   |   |   | 5.23 | % |   | $ | 24,694 |   |   |   | 3.62 | % |
|  Mortgage-backed                                                              |   |                               |   |   |                                         |   |   |                                          |   |   |                                |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  securities                                                                   |   |                               | -      |   |                                         |   | 0.00   | %                                             |   |   | 766                                 |   |   |                    | 4.38   | %      |   |   | 23,872 |   |   |   | 4.19   | %      |   |   | 23,488 |   |   |   | 5.08 | % |   |   | 48,126 |   |   |   | 4.63 | % |
|  Municipal                  bonds (Tax                                        |   |                               |   |   |                                         |   |   |                                          |   |   |                                |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  equivalent                    yields)                                        |   |                               | -      |   |                                         |   | 0.00   | %                                             |   |   | -                                   |   |   |                    | 0.00   | %      |   |   | -      |   |   |   | 0.00   | %      |   |   | 10,770 |   |   |   | 5.97 | % |   |   | 10,770 |   |   |   | 5.97 | % |
| Corporate bonds                                                               |   |                               | -      |   |                                         |   | 0.00   | %                                             |   |   | 478                                 |   |   |                    | 4.05   | %      |   |   | -      |   |   |   | 0.00   | %      |   |   | -      |   |   |   | 0.00 | % |   |   | 478 |   |   |   | 4.05 | % |
| Equity                    securities                                               |   |                               | 2,070  |   |                                         |   | 6.56   | %                                             |   |   | -                                   |   |   |                    | 0.00   | %      |   |   | -      |   |   |   | 0.00   | %      |   |   | -      |   |   |   | 0.00 | % |   |   | 2,070 |   |   |   | 6.56 | % |
|                                                                               |   | $                                  | 2,070  |   |                                         |   | 6.56   | %                                             |   | $      | 21,817                              |   |   |                    | 3.41   | %      |   | $      | 26,740 |   |   |   | 4.26   | %      |   | $      | 35,511 |   |   |   | 5.36 | % |   | $ | 86,138 |   |   |   | 4.55 | % |

----

| **Table                      4**                                |   |                               |    |   |                               |   |   |                               |   |   |                               |   |   |                               |   |   |                             |   |    |   |   |   |                             |   |   |   |    |   |                             |   |
|-----------------------------------------------------------------|--------|------------------------------------|---------|--------|------------------------------------|--------|--------|------------------------------------|--------|--------|------------------------------------|--------|--------|------------------------------------|--------|--------|----------------------------------|--------|---------|--------|--------|--------|----------------------------------|--------|--------|--------|---------|--------|----------------------------------|--------|
| Northeast                      Bancorp Consolidated   |   |                               |    |   |                               |   |   |                               |   |   |                               |   |   |                               |   |   |                             |   |    |   |   |   |                             |   |   |   |    |   |
| Loan                      Portfolio                             |   |                               |    |   |                               |   |   |                               |   |   |                               |   |   |                               |   |   |                             |   |    |   |   |   |                             |   |   |   |    |   |                             |   |
| ($                      in thousands)                           |   |                               |    |   |                               |   |   |                               |   |   |                               |   |   |                               |   |   |                             |   |    |   |   |   |                             |   |   |   |    |   |                             |   |
|                                                            |   |                               |    |   |                               |   |   |                               |   |   |                               |   |   |                               |   |   |                             |   |    |   |   |   |                             |   |   |   |    |   |                             |   |
| As                      of                                      |   | June                      30, 2007 |    |   | June                      30, 2006 |   |   | June                      30, 2005 |   |   | June                      30, 2004 |   |   | June                      30, 2003 |   |
|                                                            |   |                               |    |   |                               |   |   |                               |   |   |                               |   |   |                               |   |   |                             |   |    |   |   |   |                             |   |   |   |    |   |                             |   |
|                                                            |   |                               |    |   | 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                    |   | $                                  | 145,184 |   |                               |   | 34.34  | %                                  |   | $      | 149,100                            |   |   |                               | 34.44  | %      |                             | $      | 148,840 |   |   |   | 32.46                            | %      |   | $      | 138,031 |   |                             |   | 32.10 | % |   | $ | 125,437 |   |   |   | 33.33 | % |
| Commercial                      real estate                     |   |                               | 112,535 |   |                               |   | 26.61  | %                                  |   |   | 115,327                            |   |   |                               | 26.63  | %      |                             |   | 125,899 |   |   |   | 27.46                            | %      |   |   | 127,866 |   |                             |   | 29.74 | % |   |   | 97,854 |   |   |   | 26.00 | % |
| Construction                                                    |   |                               | 5,451   |   |                               |   | 1.29   | %                                  |   |   | 5,106                              |   |   |                               | 1.18   | %      |                             |   | 12,201  |   |   |   | 2.66                             | %      |   |   | 8,367   |   |                             |   | 1.95 | % |   |   | 7,201 |   |   |   | 1.92 | % |
| Commercial                                                      |   |                               | 40,784  |   |                               |   | 9.64   | %                                  |   |   | 50,262                             |   |   |                               | 11.61  | %      |                             |   | 68,716  |   |   |   | 14.99                            | %      |   |   | 64,304  |   |                             |   | 14.95 | % |   |   | 67,585 |   |   |   | 17.96 | % |
| Consumer                      and other                         |   |                               | 118,881 |   |                               |   | 28.12  | %                                  |   |   | 113,192                            |   |   |                               | 26.14  | %      |                             |   | 102,865 |   |   |   | 22.43                            | %      |   |   | 91,434  |   |                             |   | 21.26 | % |   |   | 78,235 |   |   |   | 20.79 | % |
|                                                            |   |                               |    |   |                               |   |   |                               |   |   |                               |   |   |                               |   |   |                             |   |    |   |   |   |                             |   |   |   |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |
| Total                      loans                                |   |                               | 422,835 |   |                               |   | 100.00 | %                                  |   |   | 432,987                            |   |   |                               | 100.00 | %      |                             |   | 458,521 |   |   |   | 100.00                           | %      |   |   | 430,002 |   |                             |   | 100.00 | % |   |   | 376,312 |   |   |   | 100.00 | % |
|                                                            |   |                               |    |   |                               |   |   |                               |   |   |                               |   |   |                               |   |   |                             |   |    |   |   |   |                             |   |   |   |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |
| Net                      deferred loan costs                    |   |                               | 2,736   |   |                               |   |   |                               |   |   | 2,676                              |   |   |                               |   |   |                             |   | 2,531   |   |   |   |                             |   |   |   | 2,592   |   |                             |   |   |   |   |   | 2,675 |   |   |   |   |   |
| Less:                                                           |   |                               |    |   |                               |   |   |                               |   |   |                               |   |   |                               |   |   |                             |   |    |   |   |   |                             |   |   |   |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |
| Allowance                      for loan losses                  |   |                               | 5,756   |   |                               |   |   |                               |   |   | 5,496                              |   |   |                               |   |   |                             |   | 5,104   |   |   |   |                             |   |   |   | 4,577   |   |                             |   |   |   |   |   | 4,016 |   |   |   |   |   |
|                                                            |   |                               |    |   |                               |   |   |                               |   |   |                               |   |   |                               |   |   |                             |   |    |   |   |   |                             |   |   |   |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |
| Net                      loans                                  |   | $                                  | 419,815 |   |                               |   |   |                               |   | $      | 430,167                            |   |   |                               |   |   |                             | $      | 455,948 |   |   |   |                             |   |   | $      | 428,017 |   |                             |   |   |   |   | $ | 374,971 |   |   |   |   |   |

| **Table                        5**                                                                                                                                                                                |   |                           |    |   |                          |   |    |                           |   |   |                           |   |   |   |    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|---------|--------|-------------------------------|--------|---------|--------------------------------|--------|--------|--------------------------------|--------|--------|--------|---------|
| Northeast                        Bancorp Consolidated                                                                                                                                                             |   |                           |    |   |                          |   |    |                           |   |   |                           |   |   |
| Maturities                        and Repricing of Loans ($ in thousands)                                                                                                                                         |   |                           |    |   |                          |   |    |                           |   |   |
| As                        of June 30, 2007                                                                                                                                                                        |   |                           |    |   |                          |   |    |                           |   |   |                           |   |   |
|                                                                                                                                                                                                              |   |                           |    |   |                          |   |    |                           |   |   |                           |   |   |   |    |
|                                                                                                                                                                                                              |   | 1                        Year  |    |   | 1                        to 5 |   |    | 5                        to 10 |   |   | Over                        10 |   |   | Total  |    |
|                                                                                                                                                                                                              |   | or                        Less |    |   | Years                         |   |    | Years                          |   |   | Years                          |   |   | Loans  |    |
| Mortgages:                                                                                                                                                                                                        |   |                           |    |   |                          |   |    |                           |   |   |                           |   |   |   |    |
| Residential                                                                                                                                                                                                       |   | $                              | 30,526  |   |                          | $      | 26,273  |                           |   | $      | 21,749                         |   |   | $      | 66,636  |   |   | $ | 145,184 |   |
| Commercial                                                                                                                                                                                                        |   |                           | 44,821  |   |                          |   | 61,851  |                           |   |   | 4,206                          |   |   |   | 1,657   |   |   |   | 112,535 |   |
| Construction                                                                                                                                                                                                      |   |                           | 5,451   |   |                          |   | -       |                           |   |   | -                              |   |   |   | -       |   |   |   | 5,451 |   |
|                                                                                                                                                                                                              |   |                           |    |   |                          |   |    |                           |   |   |                           |   |   |   |    |   |   |   |   |   |
| Non-mortgage                        loans:                                                                                                                                                                        |   |                           |    |   |                          |   |    |                           |   |   |                           |   |   |   |    |   |   |   |   |   |
| Commercial                                                                                                                                                                                                        |   |                           | 21,112  |   |                          |   | 18,337  |                           |   |   | 1,335                          |   |   |   | -       |   |   |   | 40,784 |   |
| Consumer                        and other                                                                                                                                                                         |   |                           | 1,330   |   |                          |   | 39,061  |                           |   |   | 23,863                         |   |   |   | 54,627  |   |   |   | 118,881 |   |
|                                                                                                                                                                                                              |   |                           |    |   |                          |   |    |                           |   |   |                           |   |   |   |    |   |   |   |   |   |
| Total                        loans                                                                                                                                                                                |   | $                              | 103,240 |   |                          | $      | 145,522 |                           |   | $      | 51,153                         |   |   | $      | 122,920 |   |   | $ | 422,835 |   |
|                                                                                                                                                                                                              |   |                           |    |   |                          |   |    |                           |   |   |                           |   |   |   |    |   |   |   |   |   |
| Type                        of interest rate:                                                                                                                                                                     |   |                           |    |   |                          |   |    |                           |   |   |                           |   |   |   |    |   |   |   |   |   |
| Predetermined                          rate, maturity greater than 1 year                                                                                                                                    |   | $                              | 227,728 |   |                          |   |    |                           |   |   |                           |   |   |   |    |   |   |   |   |   |
| Floating                          or adjustable rate due                          after one year                                                                                                             |   |                           | 91,867  |   |                          |   |    |                           |   |   |                           |   |   |   |    |   |   |   |   |   |
|                                                                                                                                                                                                              |   |                           |    |   |                          |   |    |                           |   |   |                           |   |   |   |    |   |   |   |   |   |
| Total                        due after 1 year:                                                                                                                                                                    |   | $                              | 319,595 |   |                          |   |    |                           |   |   |                           |   |   |   |    |   |   |   |   |   |
|                                                                                                                                                                                                              |   |                           |    |   |                          |   |    |                           |   |   |                           |   |   |   |    |   |   |   |   |   |
| 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,                | 2007                                                                                                                                                                                                              |    |   | 2006   |   |    | 2005   |   |   | 2004    |   |   | 2003   |    |
|                                                                           |                                                                                                                                                                                                              |    |   |   |   |    |   |   |   |    |   |   |   |    |   |
| Average                          net loans outstanding during the period (1)   | $                                                                                                                                                                                                                 | 432,539 |   |   | $      | 448,070 |   |   | $      | 452,951 |   |   | $      | 395,774 |   |   | $ | 380,948 |   |
|                                                                           |                                                                                                                                                                                                              |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |
| Total loans                          at end of period (1)                 | $                                                                                                                                                                                                                 | 425,571 |   |   | $      | 435,663 |   |   | $      | 461,052 |   |   | $      | 432,594 |   |   | $ | 378,987 |   |
|                                                                           |                                                                                                                                                                                                              |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |
| Allowance                          at beginning of period                      | $                                                                                                                                                                                                                 | 5,496   |   |   | $      | 5,104   |   |   | $      | 4,577   |   |   | $      | 4,016   |   |   | $ | 3,496 |   |
|                                                                           |                                                                                                                                                                                                              |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |
| Loans                          charged-off during the period:                  |                                                                                                                                                                                                              |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|                                                                           | Residential                          real estate                                                                                                                                                                  |    | 60     |   |   |    | 15     |   |   |    | 67     |   |   |    | 142 |   |   |   | 120 |   |
|                                                                           | Commercial                          real estate                                                                                                                                                                   |    | 6      |   |   |    | 35     |   |   |    | 7      |   |   |    | 124 |   |   |   | 22 |   |
|                                                                           | Commercial                                                                                                                                                                                                        |    | 251    |   |   |    | 326    |   |   |    | 389    |   |   |    | 49 |   |   |   | 130 |   |
|                                                                           | Consumer                          and other                                                                                                                                                                       |    | 538    |   |   |    | 417    |   |   |    | 472    |   |   |    | 422 |   |   |   | 699 |   |
|                                                                           |                                                                                                                                                                                                              |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |
| Total                          loans charged-off                               |                                                                                                                                                                                                              | 855     |   |   |   | 793     |   |   |   | 935     |   |   |   | 737     |   |   |   | 971 |   |
|                                                                           |                                                                                                                                                                                                              |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |
| Recoveries                          on loans previously charged-off:           |                                                                                                                                                                                                              |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|                                                                           | Residential                          real estate                                                                                                                                                                  |    | 1      |   |   |    | 1      |   |   |    | 0      |   |   |    | 60 |   |   |   | 41 |   |
|                                                                           | Commercial                          real estate                                                                                                                                                                   |    | 26     |   |   |    | 25     |   |   |    | 10     |   |   |    | 34 |   |   |   | 55 |   |
|                                                                           | Commercial                                                                                                                                                                                                        |    | 4      |   |   |    | 6      |   |   |    | 41     |   |   |    | 120 |   |   |   | 166 |   |
|                                                                           | Consumer                          and other                                                                                                                                                                       |    | 95     |   |   |    | 131    |   |   |    | 109    |   |   |    | 122 |   |   |   | 138 |   |
|                                                                           |                                                                                                                                                                                                              |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |
| Total                          recoveries                                      |                                                                                                                                                                                                              | 126     |   |   |   | 163     |   |   |   | 160     |   |   |   | 336     |   |   |   | 400 |   |
|                                                                           |                                                                                                                                                                                                              |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |
| Net                          loans charged off during the period               |                                                                                                                                                                                                              | 729     |   |   |   | 630     |   |   |   | 775     |   |   |   | 401     |   |   |   | 571 |   |
| Provision                          for loan losses                             |                                                                                                                                                                                                              | 989     |   |   |   | 1,226   |   |   |   | 1,302   |   |   |   | 962     |   |   |   | 1,091 |   |
| Reclassified                          to off-balance sheet credit risk reserve |                                                                                                                                                                                                              | 0       |   |   |   | (204    | )      |   |   | 0       |   |   |   | 0       |   |   |   | 0 |   |
|                                                                           |                                                                                                                                                                                                              |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |
| Allowance                          at end of period                            | $                                                                                                                                                                                                                 | 5,756   |   |   | $      | 5,496   |   |   | $      | 5,104   |   |   | $      | 4,577   |   |   | $ | 4,016 |   |
|                                                                           |                                                                                                                                                                                                              |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |
| Ratio                          of net charge-offs to average loans outstanding |                                                                                                                                                                                                              | 0.17    | %      |   |   | 0.14    | %      |   |   | 0.17    | %      |   |   | 0.10    | % |   |   | 0.15 | % |
|                                                                           |                                                                                                                                                                                                              |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |
| Allowance                          as a percentage of total loans              |                                                                                                                                                                                                              | 1.35    | %      |   |   | 1.26    | %      |   |   | 1.11    | %      |   |   | 1.06    | % |   |   | 1.06 | % |
|                                                                           |                                                                                                                                                                                                              |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |
| Allowance                          as a percentage of                          |                                                                                                                                                                                                              |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|                                                                           | non-performing                          and nonaccrual loans (2)                                                                                                                                                  |    | 113.08 | %      |   |    | 105.79 | %      |   |    | 300.59 | %      |   |    | 272.93 | % |   |   | 219.57 | % |
|                                                                           |                                                                                                                                                                                                              |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |
| (1)                                                                            | Excludes                          loans held for sale.                                                                                                                                                            |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |
|                                                                           |                                                                                                                                                                                                              |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |
| (2)                                                                            | The                          increase in non-performing loans in fiscal 2007 and 2006                          caused the                          allowance as a percentage of non-performing and nonaccrual     |    |
|                                                                           | loans                          to decrease compared to prior years.                                                                                                                                               |    |
|                                                                           |                                                                                                                                                                                                              |    |
|                                                                           | Management                          believes that the allowance for loan losses is adequate.                                                                                                                      |    |
|                                                                           |                                                                                                                                                                                                              |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |
|                                                                           | For                          each period indicated, this table summarizes loans outstanding                          at the end                          of each period, the average amount of loans outstanding, |    |
|                                                                           | 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, 2007 |   |   | June                            30, 2006 |   |   | June                            30, 2005 |   |   | June                            30, 2004 |   |   | June                            30, 2003 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                     |   |   |                                     |   |   |                                     |   |   |                                     |   |   |                                     |   |   |                                     |   |   |   |   |   |                                     |   |   |   |   |   |                                     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                     |   |   | 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $                                        | 808    |   |                                     |   | 34.34  | %                                        |   | $      | 672                                      |   |   |                                     | 34.44  | %      |                                     | $      | 730    |   |   |   | 32.46                                    | %      |   | $      | 636    |   |                                     |   | 32.10 | % |   | $ | 516 |   |   |   | 33.33 | % |
| Commercial                            real estate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                     | 2,000  |   |                                     |   | 26.61  | %                                        |   |   | 2,156                                    |   |   |                                     | 26.63  | %      |                                     |   | 1,670  |   |   |   | 27.46                                    | %      |   |   | 989    |   |                                     |   | 29.74 | % |   |   | 855 |   |   |   | 26.00 | % |
| Construction                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                     | 64     |   |                                     |   | 1.29   | %                                        |   |   | 56                                       |   |   |                                     | 1.18   | %      |                                     |   | 69     |   |   |   | 2.66                                     | %      |   |   | 48     |   |                                     |   | 1.95 | % |   |   | 7 |   |   |   | 1.92 | % |
| Commercial                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                     | 1,042  |   |                                     |   | 9.64   | %                                        |   |   | 1,037                                    |   |   |                                     | 11.61  | %      |                                     |   | 753    |   |   |   | 14.99                                    | %      |   |   | 1,374  |   |                                     |   | 14.95 | % |   |   | 1,640 |   |   |   | 17.96 | % |
| Consumer                            and other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                     | 1,667  |   |                                     |   | 28.12  | %                                        |   |   | 1,470                                    |   |   |                                     | 26.14  | %      |                                     |   | 1,737  |   |   |   | 22.43                                    | %      |   |   | 1,530  |   |                                     |   | 21.26 | % |   |   | 998 |   |   |   | 20.79 | % |
| Unallocated                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                     | 175    |   |                                     |   | 0.00   | %                                        |   |   | 105                                      |   |   |                                     | 0.00   | %      |                                     |   | 145    |   |   |   | 0.00                                     | %      |   |   | 0      |   |                                     |   | 0.00 | % |   |   | 0 |   |   |   | 0.00 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                     |   |   |                                     |   |   |                                     |   |   |                                     |   |   |                                     |   |   |                                     |   |   |   |   |   |                                     |   |   |   |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $                                        | 5,756  |   |                                     |   | 100.00 | %                                        |   | $      | 5,496                                    |   |   |                                     | 100.00 | %      |                                     | $      | 5,104  |   |   |   | 100.00                                   | %      |   | $      | 4,577  |   |                                     |   | 100.00 | % |   | $ | 4,016 |   |   |   | 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 previously                            charged off are                            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 problem loans, and current economic                            conditions that may                            affect the borrowers' ability to pay. Management also obtains                            collateral appraisals when considered                            necessary. |

----

| **Table                                8**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Northeast                                Bancorp Consolidated                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-performing                                Loans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  ($                                in thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | As                                of June 30, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | 2007                                          |   |   | 2006   |   |   | 2005   |   |   | 2004   |   |   | 2003   |   |
| Nonaccrual                                loans:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                real estate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | $                                             | 439    |   |   | $      | 521    |   |   | $      | 515    |   |   | $      | 214    |   |   | $ | 568 |   |
| Commercial                                real estate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                          | 1,444  |   |   |   | 1,260  |   |   |   | 33     |   |   |   | 47     |   |   |   | 524 |   |
| Commercial                                loans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                          | 708    |   |   |   | 1,423  |   |   |   | 3      |   |   |   | 85     |   |   |   | 28 |   |
| Consumer                                and other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                          | 461    |   |   |   | 109    |   |   |   | 60     |   |   |   | 101    |   |   |   | 76 |   |
|    Total                                nonaccrual loans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                          | 3,052  |   |   |   | 3,313  |   |   |   | 611    |   |   |   | 447    |   |   |   | 1,196 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current                                nonaccrual loans (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                          | 2,038  |   |   |   | 1,882  |   |   |   | 1,087  |   |   |   | 1,230  |   |   |   | 633 |   |
| Total                                non-performing loans (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                          | 5,090  |   |   |   | 5,195  |   |   |   | 1,698  |   |   |   | 1,677  |   |   |   | 1,829 |   |
| Acquired                                assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                          | -      |   |   |   | 10     |   |   |   | 89     |   |   |   | 39     |   |   |   | 97 |   |
| Total                                non-performing assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | $                                             | 5,090  |   |   | $      | 5,205  |   |   | $      | 1,787  |   |   | $      | 1,716  |   |   | $ | 1,926 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-performing                                loans to total loans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                          | 1.20   | %      |   |   | 1.19   | %      |   |   | 0.37   | %      |   |   | 0.39   | % |   |   | 0.49 | % |
| Non-performing                                assets to total assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                          | 0.91   | %      |   |   | 0.92   | %      |   |   | 0.31   | %      |   |   | 0.32   | % |   |   | 0.41 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                                of June 30, 2007, there were no troubled debt restructured                                loans.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                                additional information concerning non-performing                                and impaired loans in                                note 3 of the consolidated financial statements as                                well as in Management's                                Discussion and Analysis.                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1)                                As of June 30, 2007, comprised of commercial real                                estate loans of $589                                thousand, commercial loans of $1,396 thousand, residential                                real estate                                loans of $38 thousand and consumer loans of $15 thousand.                                                                                                                                                                                                                                                                                                                                                                                                                |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (2)                                Total non-performing loans increased in fiscal 2007                                and 2006 as compared                                to prior years primarily from commercial real estate and                                commercial loans. Loans past due 90 days or more and discretionary                                actions by management to place loans on non-accural                                account for the                                increase in both portfolios. Estimated credit losses                                were included in the                                determination of the adequacy of the allowance for                                loan                                losses. |   |

----

| **Table                                9**                                                                                                                                                                            |   |                                         |    |   |                                         |   |   |                                         |   |   |   |   |   |   |    |   |                                |   |   |   |   |   |   |   |   |                                |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|---------|--------|----------------------------------------------|--------|--------|----------------------------------------------|--------|--------|--------|--------|--------|--------|---------|--------|-------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|-------------------------------------|---------|
| Northeast                                Bancorp Consolidated                                                                                                                                          |   |                                         |    |   |                                         |   |   |                                         |   |   |   |   |   |   |    |   |                                |   |   |   |   |   |
| Average                                Deposits ($ in thousands) and Rates                                                                                                                             |   |                                         |    |   |                                         |   |   |                                         |   |   |   |   |   |   |    |   |                                |   |   |   |   |   |
|                                                                                                                                                                                                                  |   |                                         |    |   |                                         |   |   |                                         |   |   |   |   |   |   |    |   |                                |   |   |   |   |   |   |   |   |                                |    |
| For                                Years Ended                                                                                                                                                                        |   | June                                30, 2007 |    |   | June                                30, 2006 |   |   | June                                30, 2005 |   |
|                                                                                                                                                                                                                  |   |                                         |    |   |                                         |   |   | %                                of          |   |   |   |   |   |   |    |   | %                                of |   |   |   |   |   |   |   |   | %                                of |    |
|                                                                                                                                                                                                                  |   | Amount                                       |    |   | Rate                                         |   |   | Deposits                                     |   |   | Amount |   |   | Rate   |    |   | Deposits                            |   |   | Amount |   |   | Rate   |   |   | Deposits                            |    |
|                                                                                                                                                                                                                  |   |                                         |    |   |                                         |   |   |                                         |   |   |   |   |   |   |    |   |                                |   |   |   |   |   |   |   |   |                                |    |
| Average                                deposits:                                                                                                                                                                      |   |                                         |    |   |                                         |   |   |                                         |   |   |   |   |   |   |    |   |                                |   |   |   |   |   |   |   |   |                                |    |
|                                                                                                                                                                                                                  |   |                                         |    |   |                                         |   |   |                                         |   |   |   |   |   |   |    |   |                                |   |   |   |   |   |   |   |   |                                |    |   |   |   |   |   |   |   |   |   |
|  Non-interest                              bearing demand deposits                                                                                                                                               |   |                                         |    |   |                                         |   |   |                                         |   |   |   |   |   |   |    |   |                                |   |   |   |   |   |   |   |   |                                |    |   |   |   |   |   |   |   |   |   |
|                                     and escrow accounts                                                                                                                                           |   | $                                            | 35,420  |   |                                         |   | 0.00   | %                                            |   |   | 9.37   | %      |   | $      | 39,162  |   |                                |   | 0.00   | %      |   |   | 9.91   | %      |   | $                                   | 37,841  |   |   |   | 0.00 | % |   |   | 9.62 | % |
| Regular                                savings                                                                                                                                                                        |   |                                         | 22,309  |   |                                         |   | 0.87   | %                                            |   |   | 5.90   | %      |   |   | 27,453  |   |                                |   | 0.83   | %      |   |   | 6.95   | %      |   |                                | 29,056  |   |   |   | 0.79 | % |   |   | 7.39 | % |
| NOW                                and money market                                                                                                                                                                   |   |                                         | 64,024  |   |                                         |   | 2.27   | %                                            |   |   | 16.94  | %      |   |   | 73,062  |   |                                |   | 1.80   | %      |   |   | 18.48  | %      |   |                                | 82,857  |   |   |   | 1.23 | % |   |   | 21.06 | % |
| Time                                deposits                                                                                                                                                                          |   |                                         | 256,268 |   |                                         |   | 4.62   | %                                            |   |   | 67.79  | %      |   |   | 255,599 |   |                                |   | 3.76   | %      |   |   | 64.66  | %      |   |                                | 243,612 |   |   |   | 3.03 | % |   |   | 61.93 | % |
|                                                                                                                                                                                                                  |   |                                         |    |   |                                         |   |   |                                         |   |   |   |   |   |   |    |   |                                |   |   |   |   |   |   |   |   |                                |    |   |   |   |   |   |   |   |   |   |
| Total                                average deposits                                                                                                                                                                 |   | $                                            | 378,021 |   |                                         |   | 3.57   | %                                            |   |   | 100.00 | %      |   | $      | 395,276 |   |                                |   | 2.82   | %      |   |   | 100.00 | %      |   | $                                   | 393,366 |   |   |   | 2.19 | % |   |   | 100.00 | % |
|                                                                                                                                                                                                                  |   |                                         |    |   |                                         |   |   |                                         |   |   |   |   |   |   |    |   |                                |   |   |   |   |   |   |   |   |                                |    |   |   |   |   |   |   |   |   |   |
| This                                table shows the average daily amount of deposits                                and average rates paid on                                such deposits for the periods indicated. |   |

| **Table                  10**                                                   |   |    |   |
|---------------------------------------------------------------------------------|--------|---------|--------|
| Northeast                  Bancorp Consolidated                                 |   |    |   |
| Maturities                  of Certificates of Deposit $100,000 & Over |   |    |   |
| As                  of June 30, 2007                                       |   |    |   |
| ($                  in thousands)                                               |   |    |   |
|                                                                            |   |    |   |
|                                                                            |   | Balance |   |
|                                                                            |   |    |   |
| 3                  months or less                                               |   | $       | 25,535 |   |
| Over                  3 through 6 months                                        |   |    | 10,138 |   |
| Over                  6 through 12 months                                       |   |    | 23,860 |   |
| Over                  12 months                                                 |   |    | 8,565  |   |
|                                                                            |   |    |   |   |
| Total certificates                  of deposit $100,000 & over    |   | $       | 68,098 |   |

| **Table                    11**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                 |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|--------|--------|----------|--------|--------|---------|--------|--------|----------|--------|--------|---------|--------|--------|----------|--------|
| Northeast                    Bancorp Consolidated                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                                 |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |
| Short-term                    Borrowings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                                 |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |
| ($                    in thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                 |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                 |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | As                    of or For Years Ended June 30, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | 2007                                                 |   |   | 2006     |   |   | 2005    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                 |   |   | Weighted |   |   |    |   |   | Weighted |   |   |    |   |   | Weighted |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | Balance                                              |   |   | Rate     |   |   | Balance |   |   | Rate     |   |   | Balance |   |   | Rate     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                 |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |
| Balance                    at year end                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $                                                    | 33,105 |   |     |   | 4.28   | %       |   | $      | 29,637   |   |   |    | 3.79   | %      |     | $      | 33,379 |   |   |   | 1.48 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                 |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |   |   |   |   |   |   |
| Average                    outstanding during year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                 | 36,145 |   |     |   | 4.16   | %       |   |   | 31,427   |   |   |    | 2.95   | %      |     |   | 30,572 |   |   |   | 1.32 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                 |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |   |   |   |   |   |   |
| Maximum                    outstanding at any month end                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                                 | 44,164 |   |     |   |   |    |   |   | 37,237   |   |   |    |   |   |     |   | 36,506 |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                 |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |   |   |   |   |   |   |
| 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                      $31,530,000 and amortized cost of $30,348,000 at June 30, 2007,                      and a fair                      value of $33,112,000 and amortized cost of  $34,893,000 at June                      30, 2006. Sweep accounts have excess deposit insurance coverage of                      $7,300,000 at June 30, 2007. Securities sold under these agreements                      were                      under the control of the Company throughout 2007 and                      2006. |   |

----

| **Table                    12**                                                                                                                                                                                         |   |                                                      |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------|--------|--------|----------|--------|--------|---------|--------|--------|----------|--------|--------|---------|--------|--------|----------|--------|
| Northeast                    Bancorp Consolidated                                                                                                                                                                       |   |                                                      |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |
| FHLB                    Advances Due in 1 Year or  Less                                                                                                                                                       |   |                                                      |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |
| ($                    in thousands)                                                                                                                                                                                     |   |                                                      |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |
|                                                                                                                                                                                                                    |   |                                                      |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |
|                                                                                                                                                                                                                    |   | As                    of or For Years Ended June 30, |   |
|                                                                                                                                                                                                                    |   | 2007                                                      |   |   | 2006     |   |   | 2005    |   |
|                                                                                                                                                                                                                    |   |                                                      |   |   | Weighted |   |   |    |   |   | Weighted |   |   |    |   |   | Weighted |   |
|                                                                                                                                                                                                                    |   | Balance                                                   |   |   | Rate     |   |   | Balance |   |   | Rate     |   |   | Balance |   |   | Rate     |   |
|                                                                                                                                                                                                                    |   |                                                      |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |
| Balance                    at year end                                                                                                                                                                                  |   | $                                                         | 50,017 |   |     |   | 5.17   | %       |   | $      | 34,832   |   |   |    | 4.03   | %      |     | $      | 48,500 |   |   |   | 4.89 | % |
|                                                                                                                                                                                                                    |   |                                                      |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |   |   |   |   |   |   |
| Average                    outstanding during year                                                                                                                                                                      |   |                                                      | 34,672 |   |     |   | 4.45   | %       |   |   | 38,606   |   |   |    | 4.27   | %      |     |   | 40,541 |   |   |   | 5.08 | % |
|                                                                                                                                                                                                                    |   |                                                      |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |   |   |   |   |   |   |
| Maximum                    outstanding at any month end                                                                                                                                                                 |   |                                                      | 50,017 |   |     |   |   |    |   |   | 49,306   |   |   |    |   |   |     |   | 50,761 |   |   |   |   |   |
|                                                                                                                                                                                                                    |   |                                                      |   |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |   |   |   |   |   |   |
| This                    table shows the Federal Home Loan Bank Advances the Company had                    due to                    mature in one year or less as of June 30, 2007, 2006, and                    2005. |

| **Table                    13**                                                                                                                                                                                |   |                                             |     |   |   |    |     |   |                      |    |    |   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------|----------|--------|--------|---------|----------|--------|---------------------------|---------|---------|--------|--------|
| Northeast                    Bancorp Consolidated                                                                                                                                                              |   |                                             |     |   |   |    |     |   |                      |    |    |   |   |
| Maturities                    and Repricing of Interest-Earning Assets & Interest-bearing                    Liabilities                                                                                   |   |                                             |     |   |   |    |     |   |                      |    |
| As                    of June 30, 2007                                                                                                                                                                         |   |                                             |     |   |   |    |     |   |                      |    |    |   |   |
| ($                    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                                                                                                                                                                       |   | $                                                | 9,562    |   |   |  $ | 12,990   |   |                      |  $ | 63,796  |   |   |  $ | 86,348 |   |   |   | 16.68 | % |
| Regulatory                    stock                                                                                                                                                                            |   |                                             | 4,826    |   |   |    | -        |   |                      |    | 471     |   |   |   | 5,297 |   |   |   | 1.02 | % |
| Short-term                    investments (1)                                                                                                                                                                  |   |                                             | 3,313    |   |   |    |  -  |   |                      |    | -       |   |   |   | 3,313 |   |   |   | 0.64 | % |
|                                                                                                                                                                                                           |   |                                             |     |   |   |    |     |   |                      |    |    |   |   |   |   |   |   |   |   |   |
| Mortgage                    loans:                                                                                                                                                                             |   |                                             |     |   |   |    |     |   |                      |    |    |   |   |   |   |   |   |   |   |   |
| Residential                    real estate:                                                                                                                                                                    |   |                                             |     |   |   |    |     |   |                      |    |    |   |   |   |   |   |   |   |   |   |
| Fixed                    rate loans                                                                                                                                                                            |   |                                             | 115      |   |   |    | 2,922    |   |                      |    | 87,693  |   |   |   | 90,730 |   |   |   | 17.52 | % |
| Variable                    loans                                                                                                                                                                              |   |                                             | 30,411   |   |   |    | 23,351   |   |                      |    | 692     |   |   |   | 54,454 |   |   |   | 10.52 | % |
| Commercial                    real estate                                                                                                                                                                      |   |                                             | 44,821   |   |   |    | 61,851   |   |                      |    | 5,863   |   |   |   | 112,535 |   |   |   | 21.73 | % |
| Construction                                                                                                                                                                                                   |   |                                             | 5,451    |   |   |    | -        |   |                      |    | -       |   |   |   | 5,451 |   |   |   | 1.05 | % |
| Other                    loans:                                                                                                                                                                                |   |                                             |     |   |   |    |     |   |                      |    |    |   |   |   |   |   |   |   |   |   |
| Commercial                                                                                                                                                                                                     |   |                                             | 21,112   |   |   |    | 18,337   |   |                      |    | 1,335   |   |   |   | 40,784 |   |   |   | 7.88 | % |
| Consumer                    and other                                                                                                                                                                          |   |                                             | 1,330    |   |   |    | 39,061   |   |                      |    | 78,490  |   |   |   | 118,881 |   |   |   | 22.96 | % |
|  Total                    loans                                                                                                                                                                           |   |                                             | 103,240  |   |   |    | 145,522  |   |                      |    | 174,073 |   |   |   | 422,835 |   |   |   | 81.66 | % |
| Total                    interest-earning assets                                                                                                                                                               |   | $                                                | 120,941  |   |   |  $ | 158,512  |   |                      |  $ | 238,340 |   |   |  $ | 517,793 |   |   |   | 100.00 | % |
|                                                                                                                                                                                                           |   |                                             |     |   |   |    |     |   |                      |    |    |   |   |   |   |   |   |   |   |   |
| Interest-bearing                    liabilities:                                                                                                                                                               |   |                                             |     |   |   |    |     |   |                      |    |    |   |   |   |   |   |   |   |   |   |
| Customer                    deposits:                                                                                                                                                                          |   |                                             |     |   |   |    |     |   |                      |    |    |   |   |   |   |   |   |   |   |   |
| NOW                    accounts                                                                                                                                                                                |   |  $                                          | 53,405   |   |   |  $ | -        |   |                      |  $ | -       |   |   |  $ | 53,405 |   |   |   | 11.29 | % |
| Money                    market accounts                                                                                                                                                                       |   |                                             | 8,054    |   |   |    | -        |   |                      |    | -       |   |   |   | 8,054 |   |   |   | 1.70 | % |
| Regular                    savings                                                                                                                                                                             |   |                                             | 21,145   |   |   |    | -        |   |                      |    | -       |   |   |   | 21,145 |   |   |   | 4.47 | % |
| Time                    deposits                                                                                                                                                                               |   |                                             | 204,463  |   |   |    | 40,833   |   |                      |    | 321     |   |   |   | 245,617 |   |   |   | 51.91 | % |
| Total                    customer deposits                                                                                                                                                                     |   |                                             | 287,067  |   |   |    | 40,833   |   |                      |    | 321     |   |   |   | 328,221 |   |   |   | 69.37 | % |
| Borrowings:                                                                                                                                                                                                    |   |                                             |     |   |   |    |     |   |                      |    |    |   |   |   |   |   |   |   |   |   |
| Short-term                    borrowings                                                                                                                                                                       |   |                                             | 33,105   |   |   |    | -        |   |                      |    | -       |   |   |   | 33,105 |   |   |   | 7.00 | % |
| FHLB                    advances and other borrowings                                                                                                                                                          |   |                                             | 55,551   |   |   |    | 29,403   |   |                      |    | 10,355  |   |   |   | 95,309 |   |   |   | 20.14 | % |
| Junior                    subordinated debentures                                                                                                                                                              |   |                                             | 3,093    |   |   |    | 13,403   |   |                      |    | -       |   |   |   | 16,496 |   |   |   | 3.49 | % |
| Total                    borrowings                                                                                                                                                                            |   |                                             | 91,749   |   |   |    | 42,806   |   |                      |    | 10,355  |   |   |   | 144,910 |   |   |   | 30.63 | % |
| Total                    interest-bearing liabilities                                                                                                                                                          |   |  $                                          | 378,816  |   |   |  $ | 83,639   |   |                      |  $ | 10,676  |   |   |  $ | 473,131 |   |   |   | 100.00 | % |
|                                                                                                                                                                                                           |   |                                             |     |   |   |    |     |   |                      |    |    |   |   |   |   |   |   |   |   |   |
| Interest                    sensitivity gap                                                                                                                                                                    |   | $                                                | (257,875 | )      |   |  $ | 74,873   |   |                      |  $ | 227,664 |   |   |  $ | 44,662 |   |   |   |   |   |
|                                                                                                                                                                                                           |   |                                             |     |   |   |    |     |   |                      |    |    |   |   |   |   |   |   |   |   |   |
| Cumulative                    gap                                                                                                                                                                              |   | $                                                | (257,875 | )      |   |  $ | (183,002 | )      |                      |  $ | 44,662  |   |   |  $ | 44,662 |   |   |   |   |   |
|                                                                                                                                                                                                           |   |                                             |     |   |   |    |     |   |                      |    |    |   |   |   |   |   |   |   |   |   |
| Cumulative                    gap ratio                                                                                                                                                                        |   |                                             | 31.93    | %      |   |    | 60.43    | %      |                      |    | 109.44  | %      |   |   | 109.44 | % |   |   |   |   |
|                                                                                                                                                                                                           |   |                                             |     |   |   |    |     |   |                      |    |    |   |   |   |   |   |   |   |   |   |
| Cumulative                    gap as a percentage of total assets                                                                                                                                              |   |                                             | -46.31   | %      |   |    | -32.87   | %      |                      |    | 8.02    | %      |   |   | 8.02 | % |   |   |   |   |
|                                                                                                                                                                                                           |   |                                             |     |   |   |    |     |   |                      |    |    |   |   |   |   |   |   |   |   |   |
| (1)                    Includes interest-earning deposits and loans held for                    sale.                                                                                                          |   |                                             |     |   |   |    |     |   |                      |
|                                                                                                                                                                                                           |   |                                             |     |   |   |    |     |   |                      |    |    |   |   |   |   |   |   |   |   |   |
| This                    table summarizes the anticipated maturities and repricing of                    the Company's                    interest-earning assets and interest-bearing liabilities              |   |
| at                    June 30, 2007.                                                                                                                                                                           |   |
|                                                                                                                                                                                                           |   |                                             |     |   |   |    |     |   |                      |    |    |   |   |   |   |   |   |   |   |   |
| 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 high of a negative amount as presented in the schedule                    above.                                                                                                   |   |

----

| **Table                    14**                                                               |   |                        |      |   |                       |    |      |                       |   |    |                       |   |
|-----------------------------------------------------------------------------------------------|--------|-----------------------------|-----------|--------|----------------------------|---------|-----------|----------------------------|--------|---------|----------------------------|--------|
| 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 |   |
|                                                                                          |   |                        |      |   |                       |    |      |                       |   |    |                       |   |   |   |   |   |
|                                                                                          |   |                        |      |   |                       |    |      |                       |   |    |                       |   |   |   |   |   |
| Northeast                    Bancorp Consolidated                                             |   |                        |      |   |                       |    |      |                       |   |    |                       |   |   |   |   |   |
| Quarterly                    Data (Unaudited)                                                 |   |                        |      |   |                       |    |      |                       |   |    |                       |   |   |   |   |   |
| For                    Year Ended June 30, 2006                                               |   |                        |      |   |                       |    |      |                       |   |    |                       |   |   |   |   |   |
|                                                                                          |   | 1st                    Qtr  |      |   | 2nd                    Qtr |    |      | 3rd                    Qtr |   |    | 4th                    Qtr |   |
|                                                                                          |   | Sept.                    30 |      |   | Dec.                    31 |    |      | Mar.                    31 |   |    | June                    30 |   |
|                                                                                          |   | 2005                        |      |   | 2005                       |    |      | 2006                       |   |    | 2006                       |   |
| Interest                    income                                                            |   |                        |      |   |                       |    |      |                       |   |    |                       |   |   |   |   |   |
| Interest                    on loans                                                          |   | $                           | 8,018,116 |   |                       | $       | 7,978,433 |                       |   | $       | 7,698,250                  |   |   | $ | 7,948,204 |   |
| Interest                    & dividends on investments                                    |   |                        |      |   |                       |    |      |                       |   |    |                       |   |   |   |   |   |
|   &                    available-for-sale securities                            |   |                        | 852,350   |   |                       |    | 922,229   |                       |   |    | 975,370                    |   |   |   | 1,063,256 |   |
| Total                    interest and dividend income                                         |   |                        | 8,870,466 |   |                       |    | 8,900,662 |                       |   |    | 8,673,620                  |   |   |   | 9,011,460 |   |
|                                                                                          |   |                        |      |   |                       |    |      |                       |   |    |                       |   |   |   |   |   |
| Interest                    expense                                                           |   |                        |      |   |                       |    |      |                       |   |    |                       |   |   |   |   |   |
| Deposits                                                                                      |   |                        | 2,513,254 |   |                       |    | 2,771,214 |                       |   |    | 2,808,774                  |   |   |   | 3,059,064 |   |
| FHLB                    advances and other borrowings                                         |   |                        | 1,008,655 |   |                       |    | 775,365   |                       |   |    | 856,253                    |   |   |   | 976,658 |   |
| Short-term                    borrowings                                                      |   |                        | 160,437   |   |                       |    | 224,204   |                       |   |    | 251,767                    |   |   |   | 291,280 |   |
| Junior                    Subordinated Debentures                                             |   |                        | 262,056   |   |                       |    | 266,346   |                       |   |    | 264,548                    |   |   |   | 270,731 |   |
| Total                    interest expense                                                     |   |                        | 3,944,402 |   |                       |    | 4,037,129 |                       |   |    | 4,181,342                  |   |   |   | 4,597,733 |   |
|                                                                                          |   |                        |      |   |                       |    |      |                       |   |    |                       |   |   |   |   |   |
| Net                    interest income                                                        |   |                        | 4,926,064 |   |                       |    | 4,863,533 |                       |   |    | 4,492,278                  |   |   |   | 4,413,727 |   |
| Provision                    for loan losses                                                  |   |                        | 300,505   |   |                       |    | 300,104   |                       |   |    | 325,356                    |   |   |   | 300,448 |   |
|                                                                                          |   |                        |      |   |                       |    |      |                       |   |    |                       |   |   |   |   |   |
| Net                      interest income after provision for loan losses                      |   |                        | 4,625,559 |   |                       |    | 4,563,429 |                       |   |    | 4,166,922                  |   |   |   | 4,113,279 |   |
|                                                                                          |   |                        |      |   |                       |    |      |                       |   |    |                       |   |   |   |   |   |
| Securities                    transactions                                                    |   |                        | 6,736     |   |                       |    | 3,031     |                       |   |    | 1,683                      |   |   |   | 5,885 |   |
| Other                    operating income                                                     |   |                        | 1,390,298 |   |                       |    | 1,384,568 |                       |   |    | 1,779,952                  |   |   |   | 2,022,728 |   |
| Other                    operating expense                                                    |   |                        | 4,459,094 |   |                       |    | 4,386,326 |                       |   |    | 4,692,209                  |   |   |   | 4,670,875 |   |
|                                                                                          |   |                        |      |   |                       |    |      |                       |   |    |                       |   |   |   |   |   |
| Income                    before income taxes                                                 |   |                        | 1,563,499 |   |                       |    | 1,564,702 |                       |   |    | 1,256,348                  |   |   |   | 1,471,017 |   |
| Income                    tax expense                                                         |   |                        | 521,402   |   |                       |    | 493,506   |                       |   |    | 382,607                    |   |   |   | 453,852 |   |
| Net                    income                                                                 |   | $                           | 1,042,097 |   |                       | $       | 1,071,196 |                       |   | $       | 873,741                    |   |   | $ | 1,017,165 |   |
|                                                                                          |   |                        |      |   |                       |    |      |                       |   |    |                       |   |   |   |   |   |
| Earnings                    per share:                                                        |   |                        |      |   |                       |    |      |                       |   |    |                       |   |   |   |   |   |
| Basic                                                                                         |   | $                           | 0.41      |   |                       | $       | 0.42      |                       |   | $       | 0.35                       |   |   | $ | 0.43 |   |
| Diluted                                                                                       |   | $                           | 0.41      |   |                       | $       | 0.42      |                       |   | $       | 0.35                       |   |   | $ | 0.41 |   |

----

| **Item                  9.**  | **Changes                  in and Disagreements with Accountants on Accounting and Financial                  Disclosure**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|-------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                          | Not                  applicable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **Item                  9A.** | **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, 2007, 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. 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. 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. The                  Company is not subject to an attestation report from its registered                  public                  accounting firm until the fiscal year ended June 30,                  2008.  Thus, no attestation report on management's assessment of                  our internal controls over financial reporting is included in this                  annual                  report.  |
| **Item                  9B.** | **Other                  Information.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                          | None.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

**PART        III**

| **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 2007 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                  2007                  fiscal year (the "2007 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 2007 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 2007 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                  2007 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 2007 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 2007 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,                  2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

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|       Plan                  category               | (a)   Number                  of securities to beissued                  upon exercise ofoutstanding                  options | (b)   Weighted-averageexercise                  price ofoutstanding                  options |  (c)Number                  of securitiesremaining                  available forfuture                  issuance underequity                  compensation plan(excluding                  securitiesreferenced                  in the firstcolumn                  (a)) |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Equity                  compensationPlan                  approved bySecurity                  holders (1)                                             |   52,000                                                                                                                           |   $ 12.12                                                                                    |   179,500                                                                                                                                                                                                                                                             |
|                                                                                                                                                   |                                                                                                                                         |                                                                                                        |                                                                                                                                                                                                                                                                            |
| 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 2007 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 2007 Proxy Statement.                                                                                         |

**PART        IV**

| **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, 2007 and 2006                                                                                                                                                                                                                                                                                                                                     |
|                                                | Consolidated                  Statements of Income for the years ended June 30, 2007, 2006 and                  2005                                                                                                                                                                                                                                                                                          |
|                                                | Consolidated                  Statements of Changes in Stockholders' Equity for the years ended                  June 30,                  2007, 2006 and 2005                                                                                                                                                                                                                                                |
|                                                | Consolidated                  Statements of Cash Flows for the years ended June 30, 2007, 2006                  and                  2005                                                                                                                                                                                                                                                                     |
|         (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                                                                                                                                                                                                                                                                                                                                     |
| 3.2                                                 | Bylaws                  of Northeast Bancorp                                                                                                                                                                                                                                                                                                                                                                  |
| 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)                                                                                                                                                                                                                                                                                              |
| 10.3                                                | 1992                  Stock Option Plan of Northeast Bancorp (formerly known as Bethel                  Bancorp)                                                                                                                                                                                                                                                                                              |
| 10.4                                                | 1999                  Stock Option Plan of Northeast Bancorp                                                                                                                                                                                                                                                                                                                                                  |
| 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 Banker 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)). **                                                                                                                           |
|                                                |                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                | With                  the exception of the information expressly incorporated herein                  by                  reference, the Company's 2007 Proxy                  Statement for the 2007 Annual Meeting of Shareholders is not to                  be deemed                  filed as part of this Annual Report on Form                  10-K.                                                 |

----

| Date:  September                  21, 2007 | By:  /s/                  James D. Delamater |
|------------------------------------------------------|--------------------------------------------------------|
|                                                 | James                  D. Delamater, President         |

|            Name     |           Title                                                             |           Date |
|----------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------|
| /s/                  John B. BouchardJohn                  B. Bouchard     | Director                                                                                                                      | September                  21, 2007                              |
| /s/                  James P. DayJames                  P. Day             | Director                                                                                                                      | September                  21, 2007                              |
| /s/                  James D. DelamaterJames                  D. Delamater | Director,President                  and ChiefExecutive                  Officer(Principal                  Executive Officer) | September                  21, 2007                              |
| /s/                  Ronald J. GoguenRonald                  J. Goguen     | Director                                                                                                                      | September                  21, 2007                              |
| /s/                  Philip C. JacksonPhilip                  C. Jackson   | Director                                                                                                                      | September                  21, 2007                              |
| /s/                  Judith W. KelleyJudith                  W. Kelley     | Chairman                  of the Board                                                                                   | September                  21, 2007                              |
| /s/                  Pender J. LazenbyPender                  J. Lazenby   | Director                                                                                                                      | September                  21, 2007                              |
| /s/                  John RosmarinJohn                  Rosmarin           | Vice-Chairman                  of the Board                                                                                   | September                  21, 2007                              |
| /s/                  John SchiaviJohn                  Schiavi             | Director                                                                                                                      | September                  21, 2007                              |
| /s/                  Stephen W. WightStephen                  W. Wight     | Director                                                                                                                      | September                  21, 2007                              |
| /s/                  Dennis A. WilsonDennis                  A. Wilson     | Director                                                                                                                      | September                  21, 2007                              |
| /s/                  Robert S. JohnsonRobert                  S. Johnson   | Chief                  Financial Officer(Principal                  Financial andAccounting                  Officer)         | September                  21, 2007                              |

| ExhibitNumber |  Exhibit                                                                                                                                                                                                                                                                                                                                                               |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1           | Conformed                  Articles of Incorporation of Northeast Bancorp                                                                                                                                                                                                                                                                                                   |
| 3.2           | Bylaws                  of Northeast Bancorp                                                                                                                                                                                                                                                                                                                                |
| 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)                                                                                                                                                                                                                                                            |
| 10.3          | 1992                  Stock Option Plan of Northeast Bancorp (formerly known as Bethel                  Bancorp)                                                                                                                                                                                                                                                            |
| 10.4          | 1999                  Stock Option Plan of Northeast Bancorp                                                                                                                                                                                                                                                                                                                |
| 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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