Page 1



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM 10 Q

X  Quarterly report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

|For the quarter ended | December 31, 2004
|--------------------- | -----------------

Or

___ Transition report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the transition period for _______________ to _______________

|Commission File Number | 1-14588
|---------------------- | -------

Northeast Bancorp
__________________________________________________________________________________________
(Exact name of registrant as specified in its charter)

|Maine
___________________________________                           | 01-042506
____________________________________
|------------------------------------------------------------------- | ----------------------------------------------
|(State or other jurisdiction of incorporation or organization)      | (I.R.S. Employer Identification No.)          
|158 Court Street, Auburn, Maine
___________________________________ | 04210
____________________________________    
|(Address of Principal executive
 offices)                           | (Zip Code)                                    

(207) 777-6411
___________________________________________________________________________
Registrant's telephone number, including area code

Not Applicable
___________________________________________________________________________
Former name, former address and former fiscal year, if changed since last
report.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subjected to such filing requirements for the past 90 days.  Yes X  No ___

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes _  No X



Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.  As of
February 7, 2005, the registrant had outstanding 2,517,557 shares of common stock, $1.00 stated value per share.



Page 2

|Part I.  | Financial Information
|-------- | ---------------------
|         | Item 1.              
|         |                      
|         |                      
|         |                      
|         |                      
|         |                      
|         |                      
|         | Item 2.              
|         | Item 3.              
|         | Item 4.              
|Part II. | Other Information    
|         | Item 1.              
|         | Item 2.              
|         | Item 3.              
|         | Item 4.              
|         | Item 5.              
|         | Item 6.              



|                                                                                   |                                                                                  |                                                                                         |                                       |                       | Page 3        | 
|---------------------------------------------------------------------------------- | -------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------- | ------------------------------------- | --------------------- | ------------- | 
|                                                                                   |                                                                                  |                                                                                         |                                       |                       |               | 
|PART
      1 - FINANCIAL INFORMATION                                               |                                                                                 
|                                                                                   |                                                                                  |                                                                                         |                                       |                       |               | 
|Item 1.
      Financial Statements                                                 |                                                                                  |                                                                                         |                                      
|                                                                                   |                                                                                  |                                                                                         |                                       |                       |               | 
|NORTHEAST
      BANCORP AND SUBSIDIARIES                                           |                                                                                 
|Consolidated
      Balance Sheets                                                  |                                                                                 
|(Unaudited)                                                                        |                                                                                 
|                                                                                   |                                                                                  |                                                                                         |                                       |                       |               | 
|                                                                                   |                                                                                  |                                                                                         |                                       | December 31, 2004     | June 30, 2004 | 
|Assets                                                                             |                                                                                  |                                                                                         |                                      
|Cash and
      due from banks                                                      | $    
      9,977,360                                                            | $   
      13,955,361                                                                   |                                      
|Interest
      bearing deposits                                                    | 1,292,527                                                                        | 692,424                                                                                 |                                      
|                                                                                   |                                                                                  |                                                                                         | Total cash and cash
      equivalents | 11,269,887            | 14,647,785    | 
|                                                                                   |                                                                                  |                                                                                         |                                       |                       |               | 
|Available
      for sale securities, at market value                               | 66,225,553                                                                       | 67,471,144                                                                              |                                      
|Loans
      held for sale                                                          | 113,000                                                                          | 545,722                                                                                 |                                      
|                                                                                   |                                                                                  |                                                                                         |                                       |                       |               | 
|Loans
      receivable                                                             | 458,110,904                                                                      | 432,594,348                                                                             |                                      
|                                                                                   | Less
      allowance for loan losses                                             | 4,918,000                                                                               | 4,577,000                             |                      
|                                                                                   | Net
      loans                                                                  | 453,192,904                                                                             | 428,017,348                           |                      
|                                                                                   |                                                                                  |                                                                                         |                                       |                       |               | 
|Premises
      and equipment, net                                                  | 4,087,490                                                                        | 4,353,208                                                                               |                                      
|Aquired
      assets - net                                                         | 35,993                                                                           | 38,583                                                                                  |                                      
|Accrued
      interest receivable - loans                                          | 1,813,498                                                                        | 1,725,894                                                                               |                                      
|Accrued
      interest receivable - investments                                    | 478,331                                                                          | 467,275                                                                                 |                                      
|FHLB and
      FRB stock, at cost                                                  | 7,050,000                                                                        | 6,644,500                                                                               |                                      
|Goodwill                                                                           | 407,897                                                                          | 407,897                                                                                 |                                      
|Intangible
      assets, net of accumulated amortization of $1,996,968 at 12/31/04 |                                                                                  |                                                                                         |                                      
|and
      $1,875,835 at 6/30/04                                                    | 2,289,260                                                                        | 328,893                                                                                 |                                      
|Bank
      owned life insurance (BOLI)                                             | 7,892,143                                                                        | 7,759,944                                                                               |                                      
|Other
      assets                                                                 | 5,871,661                                                                        | 6,345,707                                                                               |                                      
|                                                                                   | Total
      assets                                                               | $ 
      560,727,617                                                                    | $ 
      538,753,900                  |                      
|                                                                                   |                                                                                  |                                                                                         |                                       | ========              | ========      | 
|                                                                                   |                                                                                  |                                                                                         |                                       |                       |               | 
|Liabilities
      and Stockholders' Equity                                         |                                                                                  |                                                                                         |                                      
|                                                                                   |                                                                                  |                                                                                         |                                       |                       |               | 
|Liabilities:                                                                       |                                                                                  |                                                                                         |                                      
|                                                                                   | Deposits                                                                         |                                                                                         |                                       |                      
|                                                                                   |                                                                                  | Demand                                                                                  | $   
      36,819,989                 | $   
      37,799,644 |              
|                                                                                   |                                                                                  | NOW                                                                                     | 64,526,464                            | 64,317,533            |              
|                                                                                   |                                                                                  | Money
      market                                                                      | 16,238,069                            | 17,553,102            |              
|                                                                                   |                                                                                  | Regular
      savings                                                                   | 28,072,979                            | 28,804,916            |              
|                                                                                   |                                                                                  | Brokered
      time deposits                                                            | 80,468,395                            | 96,713,190            |              
|                                                                                   |                                                                                  | Certificates
      of deposit                                                           | 156,126,469                           | 132,631,344           |              
|                                                                                   |                                                                                  |                                                                                         | Total deposits                        | 382,252,365           | 377,819,729   | 
|                                                                                   |                                                                                  |                                                                                         |                                       |                       |               | 
|                                                                                   | FHLB
      advances                                                              | 85,199,648                                                                              | 82,977,634                            |                      
|                                                                                   | Other
      borrowings                                                           | 476,465                                                                                 | -                                     |                      
|                                                                                   | Securities
      sold under repurchase agreements                                | 35,043,909                                                                              | 24,884,869                            |                      
|                                                                                   | Junior
      subordinated debentures issued to affiliated trusts                 | 16,496,000                                                                              | 13,580,849                            |                      
|                                                                                   | Other
      liabilities                                                          | 2,949,460                                                                               | 3,037,799                             |                      
|                                                                                   |                                                                                  |                                                                                         | Total liabilities                     | 522,417,847           | 502,300,880   | 
|                                                                                   |                                                                                  |                                                                                         |                                       |                       |               | 
|Commitments
      and contingent liabilities                                       |                                                                                  |                                                                                         |                                      
|                                                                                   |                                                                                  |                                                                                         |                                       |                       |               | 
|Stockholders'
      equity                                                         |                                                                                  |                                                                                         |                                      
|                                                                                   | Preferred
      stock, cumulative, $1 par value, 1,000,000 shares authorized     |                                                                                         |                                       |                      
|                                                                                   |                                                                                  | and none
      issued and outstanding                                                   | -                                     | -                     |              
|                                                                                   | Common
      stock, at stated value, 15,000,000 shares authorized; 2,514,557 and |                                                                                         |                                       |                      
|                                                                                   |                                                                                  | 2,525,416
      shares outstanding at December 31, 2004 and June 30, 2004, respectively | 2,514,557                             | 2,525,416             |              
|                                                                                   | Additional
      paid in capital                                                 | 6,486,158                                                                               | 6,943,894                             |                      
|                                                                                   | Retained
      earnings                                                          | 29,648,601                                                                              | 28,380,678                            |                      
|                                                                                   | Accumulated
      other comprehensive (loss)                                     | (339,546)                                                                               | (1,396,968)                           |                      
|                                                                                   |                                                                                  | Total
      stockholders' equity                                                        | 38,309,770                            | 36,453,020            |              
|                                                                                   |                                                                                  |                                                                                         |                                       |                       |               | 
|                                                                                   |                                                                                  |                                                                                         |                                       |                       |               | 
|                                                                                   |                                                                                  | Total
      liabilities and stockholders' equity                                        | $  
      560,727,617                 | $  
      538,753,900 |              
|                                                                                   |                                                                                  |                                                                                         |                                       | =========             | =========     | 



|                                         |                                                               |                                                            |                          | Page 4             
|---------------------------------------- | ------------------------------------------------------------- | ---------------------------------------------------------- | ------------------------ | -------------------
|                                         |                                                               |                                                            |                          |                    
|NORTHEAST BANCORP AND
      SUBSIDIARIES
|Consolidated Statements of Income       
|(Unaudited)                             
|                                         |                                                               |                                                            |                          |                    
|                                         |                                                               |                                                            | Three
      Months Ended
|                                         |                                                               |                                                            | December
      31,      
|                                         |                                                               |                                                            | 2004                     | 2003               
|Interest and
      dividend income:      |                                                               |                                                           
|                                         | Interest on loans                                             | $  
      7,199,425                                        | $  
      6,287,851     
|                                         | Interest on FHLB
      overnight deposits                     | 13,782                                                     | 3,710                   
|                                         | Interest and
      dividends on available for sale securities | 672,823                                                    | 533,675                 
|                                         | Dividends on FHLB
      and FRB stock                         | 64,540                                                     | 46,057                  
|                                         | Other interest
      income                                   | 1,705                                                      | 901                     
|                                         |                                                               | Total interest and dividend
      income                   | 7,952,275                | 6,872,194          
|                                         |                                                               |                                                            |                          |                    
|Interest expense:                        |                                                               |                                                           
|                                         | Deposits                                                      | 2,102,444                                                  | 1,562,217               
|                                         | Repurchase
      agreements                                   | 101,311                                                    | 79,566                  
|                                         | FHLB advances                                                 | 918,450                                                    | 1,121,860               
|                                         | Other
      borrowings                                        | 10,443                                                     | -                       
|                                         | Junior subordinated
      debentures                          | 301,056                                                    | 187,245                 
|                                         |                                                               | Total interest expense                                     | 3,433,704                | 2,950,888          
|                                         |                                                               |                                                            |                          |                    
|                                         |                                                               | Net interest income before
      provision for loan losses | 4,518,571                | 3,921,306          
|                                         |                                                               |                                                            |                          |                    
|Provision for loan
      losses          | 299,984                                                       | 240,802                                                   
|                                         |                                                               | Net interest income after
      provision for loan losses  | 4,218,587                | 3,680,504          
|                                         |                                                               |                                                            |                          |                    
|Noninterest income:                      |                                                               |                                                           
|                                         | Fees and service
      charges on loans                       | 152,915                                                    | 166,078                 
|                                         | Fees for other
      services to customers                    | 250,248                                                    | 245,363                 
|                                         | Net securities gains                                          | 37,527                                                     | 74,856                  
|                                         | (Loss)gain on
      trading activities                        | -                                                          | 4,439                   
|                                         | Gain on sales of
      loans                                  | 58,636                                                     | 101,420                 
|                                         | Investment
      commissions                                  | 379,925                                                    | 413,838                 
|                                         | Insurance
      commissions                                   | 375,946                                                    | 81,745                  
|                                         | BOLI income                                                   | 67,096                                                     | 85,701                  
|                                         | Other income                                                  | 105,558                                                    | 73,503                  
|                                         |                                                               | Total noninterest income                                   | 1,427,851                | 1,246,943          
|                                         |                                                               |                                                            |                          |                    
|Noninterest expense:                     |                                                               |                                                           
|                                         | Salaries and
      employee benefits                          | 2,385,609                                                  | 2,060,636               
|                                         | Occupancy expense                                             | 345,677                                                    | 291,616                 
|                                         | Equipment expense                                             | 286,389                                                    | 253,269                 
|                                         | Intangible assets
      amortization                          | 97,736                                                     | 66,468                  
|                                         | Other                                                         | 1,418,944                                                  | 933,435                 
|                                         |                                                               | Total noninterest expense                                  | 4,534,355                | 3,605,424          
|                                         |                                                               |                                                            |                          |                    
|Income before income
      taxes         | 1,112,083                                                     | 1,322,023                                                 
|Income tax expense                       | 347,201                                                       | 432,005                                                   
|                                         |                                                               |                                                            |                          |                    
|                                         |                                                               | Net income                                                 | $    
      764,882      | $    
      890,018
|                                         |                                                               |                                                            | =======                  | =======            
|                                         |                                                               |                                                            |                          |                    
|Earnings per common
      share:         |                                                               |                                                           
|                                         | Basic                                                         | $          
      0.30                                     | $           
      0.35 
|                                         | Diluted                                                       | $          
      0.30                                     | $           
      0.34 
|                                         |                                                               |                                                            |                          |                    
|                                         |                                                               | Net interest margin                                        | 3.37%                    | 3.43%              
|                                         |                                                               | Net interest spread                                        | 3.16%                    | 3.20%              
|                                         |                                                               | Return on average assets
      (annualized)                | 0.54%                    | 0.74%              
|                                         |                                                               | Return on average equity
      (annualized)                | 7.89%                    | 9.66%              
|                                         |                                                               | Efficiency ratio                                           | 76%                      | 70%                

|                                         |                                                               |                                                            |                              | Page 5              
|---------------------------------------- | ------------------------------------------------------------- | ---------------------------------------------------------- | ---------------------------- | --------------------
|                                         |                                                               |                                                            |                              |                     
|NORTHEAST BANCORP AND
      SUBSIDIARIES
|Consolidated Statements of Income       
|(Unaudited)                             
|                                         |                                                               |                                                            |                              |                     
|                                         |                                                               |                                                            | Six
      Months
      Ended
|                                         |                                                               |                                                            | December
      31,          
|                                         |                                                               |                                                            | 2004                         | 2003                
|Interest and
      dividend income:      |                                                               |                                                           
|                                         | Interest on loans                                             | $   
      14,030,357                                      | $   
      12,493,134       
|                                         | Interest on FHLB
      overnight deposits                     | 20,245                                                     | 9,854                       
|                                         | Interest and
      dividends on available for sale securities | 1,350,105                                                  | 901,169                     
|                                         | Dividends on FHLB
      and FRB stock                         | 116,673                                                    | 97,137                      
|                                         | Other interest
      income                                   | 2,795                                                      | 1,929                       
|                                         |                                                               | Total interest and dividend
      income                   | 15,520,175                   | 13,503,223          
|                                         |                                                               |                                                            |                              |                     
|Interest expense:                        |                                                               |                                                           
|                                         | Deposits                                                      | 4,075,971                                                  | 3,175,853                   
|                                         | Repurchase
      agreements                                   | 180,701                                                    | 145,553                     
|                                         | FHLB advances                                                 | 1,875,934                                                  | 2,289,028                   
|                                         | Other
      borrowings                                        | 10,443                                                     | -                           
|                                         | Junior subordinated
      debentures                          | 582,206                                                    | 363,766                     
|                                         |                                                               | Total interest expense                                     | 6,725,255                    | 5,974,200           
|                                         |                                                               |                                                            |                              |                     
|                                         |                                                               | Net interest income before
      provision for loan losses | 8,794,920                    | 7,529,023           
|                                         |                                                               |                                                            |                              |                     
|Provision for loan
      losses          | 600,121                                                       | 480,802                                                   
|                                         |                                                               | Net interest income after
      provision for loan losses  | 8,194,799                    | 7,048,221           
|                                         |                                                               |                                                            |                              |                     
|Noninterest income:                      |                                                               |                                                           
|                                         | Fees and service
      charges on loans                       | 213,464                                                    | 315,037                     
|                                         | Fees for other
      services to customers                    | 492,178                                                    | 487,035                     
|                                         | Net securities gains                                          | 39,091                                                     | 118,351                     
|                                         | (Loss)gain on
      trading activities                        | (160)                                                      | 11,504                      
|                                         | Gain on sales of
      loans                                  | 110,540                                                    | 532,586                     
|                                         | Investment
      commissions                                  | 834,761                                                    | 778,026                     
|                                         | Insurance
      commissions                                   | 473,279                                                    | 162,425                     
|                                         | BOLI income                                                   | 160,093                                                    | 188,961                     
|                                         | Other income                                                  | 268,543                                                    | 151,230                     
|                                         |                                                               | Total noninterest income                                   | 2,591,789                    | 2,745,155           
|                                         |                                                               |                                                            |                              |                     
|Noninterest expense:                     |                                                               |                                                           
|                                         | Salaries and
      employee benefits                          | 4,664,461                                                  | 4,063,328                   
|                                         | Occupancy expense                                             | 655,454                                                    | 601,825                     
|                                         | Equipment expense                                             | 542,099                                                    | 511,937                     
|                                         | Intangible assets
      amortization                          | 121,133                                                    | 132,936                     
|                                         | Other                                                         | 2,305,022                                                  | 1,823,289                   
|                                         |                                                               | Total noninterest expense                                  | 8,288,169                    | 7,133,315           
|                                         |                                                               |                                                            |                              |                     
|Income before income
      taxes         | 2,498,419                                                     | 2,660,061                                                 
|Income tax expense                       | 777,422                                                       | 853,662                                                   
|                                         |                                                               |                                                            |                              |                     
|                                         |                                                               | Net income                                                 | $   
      1,720,997         | $   
      1,806,399
|                                         |                                                               |                                                            | =======                      | =======             
|                                         |                                                               |                                                            |                              |                     
|Earnings per common
      share:         |                                                               |                                                           
|                                         | Basic                                                         | $             
      0.68                                  | $             
      0.71   
|                                         | Diluted                                                       | $             
      0.67                                  | $             
      0.69   
|                                         |                                                               |                                                            |                              |                     
|                                         |                                                               | Net interest margin                                        | 3.32%                        | 3.35%               
|                                         |                                                               | Net interest spread                                        | 3.11%                        | 3.10%               
|                                         |                                                               | Return on average assets
      (annualized)                | 0.62%                        | 0.76%               
|                                         |                                                               | Return on average equity
      (annualized)                | 8.98%                        | 9.78%               
|                                         |                                                               | Efficiency ratio                                           | 73%                          | 69%                 



|                                                                 |                                                    |                                                   |             |                      |                               |               |             | Page 6   
|---------------------------------------------------------------- | -------------------------------------------------- | ------------------------------------------------- | ----------- | -------------------- | ----------------------------- | ------------- | ----------- | ---------
|NORTHEAST BANCORP AND
      SUBIDIARIES                         
|Consolidated Statements of
      Changes in Stockholders' Equity
|Six Months Ended December 31,
      2004 and 2003               
|(Unaudited)                                                     
|                                                                 |                                                    |                                                   |             |                      |                               |               |             |          
|                                                                 |                                                    |                                                   |             |                      |                               | Accumulated   |             |          
|                                                                 |                                                    |                                                   |             | Additional           |                               | Other         |             |          
|                                                                 |                                                    |                                                   | Common      | Paid-in              | Retained                      | Comprehensive | Treasury    |          
|                                                                 |                                                    |                                                   | Stock       | Capital              | Earnings                      | Income (Loss) | Stock       | Total    
|Balance at June 30,
      2003                                   | $2,786,095                                         | $10,381,692                                       | $25,756,832 | $      
      91,169 | $(2,516,340)                  | $36,499,448  
|                                                                 | Net income for six
      months ended 12/31/03     | -                                                 | -           | 1,806,399            | -                             | -             | 1,806,399  
|                                                                 | Other comprehensive
      income net of tax:       |                                                   |             |                      |                               |               |            
|                                                                 |                                                    | Net unrealized losses on
      investments        |             |                      |                               |               |             |          
|                                                                 |                                                    | available for sale, net of
      reclassification |             |                      |                               |               |             |          
|                                                                 |                                                    | adjustment                                        | -           | -                    | -                             | (434,745)     | -           | (434,745)
|                                                                 |                                                    | Total comprehensive income                        | -           | -                    | -                             | -             | -           | 1,371,654
|                                                                 |                                                    |                                                   |             |                      |                               |               |             |          
|                                                                 | Dividends on common
      stock at $0.17 per share | -                                                 | -           | (450,658)            | -                             | -             | (450,658)  
|                                                                 | Treasury stock
      purchased                     | -                                                 | -           | -                    | -                             | (1,172,205)   | (1,172,205)
|                                                                 | Common stock issued
      in connection with       |                                                   |             |                      |                               |               |            
|                                                                 |                                                    | employee benefit and stock
      option plan      | -           | 31,183               | -                             | -             | 85,389      | 116,572  
|                                                                 |                                                    |                                                   | _________   | _________            | _________                     | _________     | _________   | _________
|Balance at December
      31, 2003                               | $2,786,095                                         | $10,412,875                                       | $27,112,573 | $ 
      (343,576)   | $(3,603,156)                  | $36,364,811  
|                                                                 |                                                    |                                                   | =======     | =======              | =======                       | =======       | =======     | =======  
|                                                                 |                                                    |                                                   |             |                      |                               |               |             |          
|Balance at June 30,
      2004                                   | $2,525,416                                         | $6,943,894                                        | $28,380,678 | $(1,396,968)         | $     
              
      - | $36,453,020  
|                                                                 | Net income for six
      months ended 12/31/04     | -                                                 | -           | 1,720,997            | -                             | -             | 1,720,997  
|                                                                 | Other comprehensive
      income net of tax:       |                                                   |             |                      |                               |               |            
|                                                                 |                                                    | Net unrealized gains on
      investments         |             |                      |                               |               |             |          
|                                                                 |                                                    | available for sale, net of
      reclassification |             |                      |                               |               |             |          
|                                                                 |                                                    | adjustment                                        | -           | -                    | -                             | 1,057,422     | -           | 1,057,422
|                                                                 |                                                    | Total comprehensive income                        | -           | -                    | -                             | -             | -           | 2,778,419
|                                                                 |                                                    |                                                   |             |                      |                               |               |             |          
|                                                                 | Dividends on common
      stock at $0.18 per share | -                                                 | -           | (453,074)            | -                             | -             | (453,074)  
|                                                                 | Purchase of 30,000
      shares of Company stock   | (30,000)                                          | (540,000)   | -                    | -                             | -             | (570,000)  
|                                                                 | Common stock issued
      in connection with       |                                                   |             |                      |                               |               |            
|                                                                 |                                                    | employee benefit and stock
      option plan      | 19,141      | 82,264               | -                             | -             |             | 101,405  
|                                                                 |                                                    |                                                   | _________   | _________            | _________                     | _________     | _________   | _________
|Balance at December
      31, 2004                               | $2,514,557                                         | $6,486,158                                        | $29,648,601 | $  (339,546)         | $              
      -       | $38,309,770  
|                                                                 | =======                                            | =======                                           | =======     | =======              | =======                       | =======      



|                                                                       |                        | Page 7             
|---------------------------------------------------------------------- | ---------------------- | -------------------
|                                                                       |                        |                    
|NORTHEAST BANCORP AND
      SUBSIDIARIES                              
|Consolidated Statements of Cash
      Flows                           
|(Unaudited)                                                           
|                                                                       |                        |                    
|                                                                       | Six
      Months Ended
|                                                                       | December
      31,    
|                                                                       | 2004                   | 2003               
|Cash provided by operating
      activities:                           | $  
      3,011,355    | $  
      5,522,473
|                                                                       |                        |                    
|Cash flows from investing
      activities:                            |                        |                    
|Federal Reserve stock purchased                                        | (405,500)              | -                  
|Available for sale securities
      purchased                          | (1,901,051)            | (31,812,611)       
|Available for sale securities
      matured                            | 4,037,571              | 3,551,547          
|Available for sale securities
      sold                               | 669,133                | 7,519,079          
|Net change in loans                                                    | (25,937,699)           | (18,026,730)       
|Net capital expenditures                                               | (449,234)              | (664,558)          
|Proceeds from sale of premises
      and equipment                     | 481,794                | -                  
|Proceeds from sale of acquired
      assets                            | 290,180                | 194,816            
|Purchase of retirement annuity                                         | (900,000)              | -                  
|Acquisition of business                                                | (993,469)              | -                  
|Net cash used in investing
      activities                            | (25,108,275)           | (39,238,457)       
|                                                                       |                        |                    
|Cash flows from financing
      activities:                            |                        |                    
|Net change in deposits                                                 | 4,432,636              | 22,020,668         
|Net change in repurchase
      agreements                              | 10,159,040             | 10,328,804         
|Dividends paid                                                         | (453,075)              | (450,658)          
|Proceeds from stock issuance                                           | 101,405                | 116,572            
|Company stock repurchased                                              | (570,000)              | (1,172,205)        
|Advances from the Federal Home
      Loan Bank                         | 20,500,000             | 7,500,000          
|Repayment of advances from the
      Federal Home Loan Bank            | (12,900,986)           | (13,384,709)       
|Net repayments on Federal Home
      Loan Bank overnight advances      | (5,377,000)            | (3,045,000)        
|Debt issuance cost paid                                                | -                      | (120,000)          
|Proceeds from issuance of Junior
      Subordinated Debentures         | 10,000,000             | 6,000,000          
|Repayment of Junior Subordinated
      Debentures                      | (7,172,998)            | -                  
|Net cash provided by financing
      activities                        | 18,719,022             | 27,793,472         
|                                                                       |                        |                    
|Net decrease in cash and cash
      equivalents                        | (3,377,898)            | (5,922,512)        
|                                                                       |                        |                    
|Cash and cash equivalents,
      beginning of period                   | 14,647,785             | 18,807,919         
|Cash and cash equivalents, end
      of period                         | $ 
      11,269,887    | $ 
      12,885,407
|                                                                       | ========               | ========           
|                                                                       |                        |                    
|Cash and cash equivalents
      include cash on hand, amounts due      |                        |                    
|from banks, and interest bearing
      deposits.                       |                        |                    
|                                                                       |                        |                    
|Supplemental schedule of noncash
      activities:                     |                        |                    
|Net change in valuation for
      unrealized gains/losses, net of tax, |                        |                    
|on available for sale securities                                       | 1,057,422              | (434,745)          
|Net transfer from loans to
      acquired assets                       | 302,590                | 179,955            
|Assumption of debt from
      Solon-Anson Insurance Agency             | 683,104                | -                  
|Deferred tax liability related
      to Solon-Anson acquisition        | 450,877                | -                  
|                                                                       |                        |                    
|Supplemental disclosure of cash
      paid during the period for:      |                        |                    
|Income taxes paid, net of
      refunds                                | 1,043,222              | 794,368            
|Interest paid                                                          | 6,589,504              | 5,935,297          



Page 8

NORTHEAST BANCORP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2004

1.  Basis of Presentation

The accompanying unaudited condensed and consolidated financial statements
have been prepared in accordance with accounting principles generally accepted
in the United States of America for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by accounting
principles generally accepted in the United States of America for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the six-month period ended December 31,
2004 are not necessarily indicative of the results that may be expected for the
fiscal year ending June 30, 2005. For further information, refer to the audited
consolidated financial statements and footnotes thereto for the fiscal year
ended June 30, 2004 included in the Company's Annual Report on Form 10-K.
Certain June 30, 2004 amounts have been reclassified to be consistent with the
December 31, 2004 financial statements.

2.  Junior Subordinated Debentures

NBN Capital Trust ("NBNCT"), a Delaware statutory trust, was
created in October of 1999. The NBNCT exists for the exclusive purpose of (i)
issuing and selling Common Securities and Preferred Securities of NBNCT to the
public (together the "NBNCT Trust Securities"), (ii) using the
proceeds of the sale of NBNCT Trust Securities to acquire 9.60% Junior
Subordinated Deferrable Interest Debentures ("Junior Subordinated
Debentures") issued by the Company, and (iii) engaging only in those other
activities necessary, convenient, or incidental thereto (such as registering the
transfer of the NBNCT Trust Securities). NBNCT sold $7,172,998 of its trust
preferred securities to the public and $221,851 of its common securities to the
Company. The NBNCT Trusts Preferred Securities are mandatorily redeemable upon
the maturity of the Junior Subordinated Debentures on December 31, 2029 or upon
earlier redemption as provided in the indenture. The Company had the right to
redeem the Junior Subordinated Debentures, in whole or in part on or after
December 31, 2004. The Company exercised its right to redeem the Junior
Subordinated Debentures on December 31, 2004. On that date, NBNCT paid the
liquidation amount of $7.00 per preferred security plus accrued interest due
based upon an annual interest rate of 9.60%, or a total of $7,345,150. The
proceeds from the sale of Trust Preferred Securities by NBN Capital Trust IV,
described below, were used in part for this redemption.

NBN Capital Trust II and III were created in December 2003 and NBN Capital
Trust IV was created December 2004. Each such trust is a Delaware statutory
trust (together, the "Private Trusts"). The exclusive purpose of the
Private Trusts was (i) issuing and selling Common Securities and Preferred
Securities in a private placement offering, (ii) using the proceeds of the sale
of the Private Trust Securities to acquire Junior Subordinated Deferrable
Interest Notes ("Junior Subordinated Notes"); and (iii) engaging only
in those other activities necessary, convenient, or incidental thereto.
Accordingly the Junior Subordinated Notes are the sole assets of each of the
Private Trusts. NBN Capital Trust II pays a variable rate based on three month
LIBOR, NBN Capital Trust III pays a 6.50% fixed rate until March 30, 2009 when
the rate changes to a variable rate based on three month LIBOR, and NBN Capital
Trust IV pays a 5.88% fixed rate until February 23, 2010 when the rate changes
to a variable rate based on three month LIBOR. Accordingly, the Preferred
Securities of the Private Trusts currently pay quarterly distributions at an
annual rate 5.35% for the stated liquidation amount of $1,000 per Preferred
Security for NBN Capital Trust II, an annual rate of 6.50% for the stated
liquidation amount of $1,000 per Preferred Security for NBN Capital Trust III
and an annual rate of 5.88% for the state liquidation amount of $1,000 per
Preferred Security for NBN Capital Trust IV. The Company has fully and
unconditionally guaranteed all of the obligations of each trust. The guaranty
covers the quarterly distributions and payments on liquidation or redemption of
the Private Trust Preferred Securities, but only to the extent of funds held by
the trusts. Based on the current rates, the annual interest expense is
approximately $943,500.

NBN Capital Trusts II and III sold a total of $6,000,000 and NBN Capital
Trust IV sold a total of $10,000,000 of its trust preferred securities in two
separate private placement offerings. NBN Capital Trusts II and III sold a total
of $186,000 and NBN Capital Trust IV sold a total of $310,000 of its common
securities to the Company. The Private Trusts Preferred Securities are
mandatorily redeemable upon the maturity of the Junior Subordinated Debentures
on March 30, 2034 for NBN Capital Trusts II and III and on February 23, 2035 for
NBN Capital Trust IV, or upon earlier redemption as provided in the indenture.
The Company has the right to redeem the Junior Subordinated Notes, in whole or
in part on or after March 30, 2009 for NBN Capital Trusts II and III, and on or
after February 23, 2010 for NBN Capital Trust IV at the redemption price
specified in the Indenture plus any accrued but unpaid interest to the
redemption date.

Page 9

3.  Loans

The following is a summary of the composition of loans at:

|                        | December 31, 2004                 | June 30, 2004                    
|----------------------- | --------------------------------- | ---------------------------------
|Residential real estate | $  149,049,534                    | $  138,031,157                   
|Commercial real estate  | 125,660,956                       | 122,431,149                      
|Construction            | 12,124,498                        | 8,367,388                        
|Commercial              | 73,233,371                        | 69,738,330                       
|Consumer & Other        | 95,568,748                        | 91,433,974                       
|Total                   | 455,637,107                       | 430,001,998                      
|Net Deferred Costs      | 2,473,797                         | 2,592,350                        
|Net Loans               | $  458,110,904  
    ============ | $  432,594,348  
    ============

4.  Allowance for Loan Losses

The following is an analysis of transactions in the allowance for loan
losses:

|                                           | Six months Ended
      December 31,
|------------------------------------------ | -----------------------------------
|                                           | 2004                               
|Balance at beginning of period             | $  4,577,000                       
|Add provision charged to operations        | 600,121                            
|Recoveries on loans previously charged off | 76,267                             
|                                           | 5,253,388                          
|Less loans charged off                     | 335,388                            
|Balance at end of period                   | $   4,918,000   
    ==========    

5.  Securities

Securities available for sale at cost and approximate market values and
maturities are summarized below:

|                                                                                                            | December 31, 2004                | June 30, 2004                 
|----------------------------------------------------------------------------------------------------------- | -------------------------------- | ------------------------------
|                                                                                                            | Cost                             | Market      Value             
|Debt securities issued by the U.S. Treasury
      and other U.S. Government corporations
      and agencies | $  4,399,244                     | $4,352,476                    
|Government sponsored entities-FHLMC & FNMA                                                                  | 22,277,699                       | 21,868,919                    
|Corporate bonds                                                                                             | 500,000                          | 497,520                       
|Mortgage-backed securities                                                                                  | 37,662,565                       | 37,523,231                    
|Equity securities                                                                                           | 1,900,508                        | 1,983,407                     
|                                                                                                            | $   66,740,016 
      ========== | $ 66,225,553 
      ==========

|                                                                                                                                                           | December 31, 2004              | June 30, 2004                  
|---------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------ | -------------------------------
|                                                                                                                                                           | Cost                           | Market      Value              
|Due after one year through five years                                                                                                                      | $   17,234,216                 | $   16,884,874                 
|Due after five years through ten years                                                                                                                     | 8,552,791                      | 8,510,885                      
|Due after ten years                                                                                                                                        | 1,389,936                      | 1,323,156                      
|Mortgage-backed securities (including
      securities with interest rates ranging from
      4.0% to 8.5% maturing February 2005 to
      September 2032) | 37,662,565                     | 37,523,231                     
|Equity securities                                                                                                                                          | 1,900,508                      | 1,983,407                      
|                                                                                                                                                           | $  66,740,016
      ========== | $  66,225,553 
      ==========

Page 10

6.  Advances from the Federal Home Loan Bank

A summary of borrowings from the Federal Home Loan Bank is as follows:

|December 31, 2004      
|-----------------------
|PrincipalAmounts       
|$ 46,605,828           
|3,000,000              
|19,264,905             
|9,328,915              
|7,000,000              
|$   85,199,648=========



|June 30, 2004               
|----------------------------
|PrincipalAmounts            
|$   21,493,278              
|31,500,000                  
|7,000,000                   
|15,984,356                  
|7,000,000                   
|$   82,977,634     =========

Page 11

7.  Stock Option Plans

Northeast Bancorp grants "incentive stock options" only to
employees of the Company, and grants "nonqualified stock options" to
employees and non-employee directors. All options granted under these plans are
required to have an exercise price per share equal to at least the fair market
value per share of common stock on the date the option is granted. Under
Accounting Principle Board Opinion No. 25, no compensation expense is recognized
if the exercise price of the option is greater than or equal to the fair market
value of the underlying stock on the date of grant. The options vest immediately
upon being granted.

The Company has elected to present in the notes of the consolidated financial
statements the impact to net income and earnings per share of estimating the
fair value of each option on the date of grant using the Black-Scholes
option-pricing model. No options were granted for the previous fiscal year. The
Company has elected to continue to disclose in the notes to the consolidated
financial statements under SFAS 148, Accounting for Stock-Based Compensation
- Transition and Disclosure, an amendment of SFAS 123. If the Company had
determined the cost for its stock options based on the fair value method at the
grant date under SFAS 123, Accounting for Stock-Based Compensation, the
Company's pro forma net income and earnings per share for the three and six
months ended December 31, 2004 and 2003 would have been the amounts shown below.
The Financial Accounting Standards Board has issued a revision of SFAS 123,
effective after June 15, 2005, that requires the fair value method be used to
account for stock base compensation and the recognition of the fair value of
stock options as compensation expense in the financial statements.

|                                                                                                                                         | For the Three MonthsEnded December 31, | For the Six MonthsEnded December 31,
|---------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------- | ------------------------------------
|                                                                                                                                         | 2004                                   | 2003                                
|Net Income as reported                                                                                                                   | $   764,882                            | $   890,018                         
|Deduct: Total stock-based compensation expense determined under fair
      value based method for all awards, net of related tax effects | 1,459                                  | --                                  
|Pro forma net income                                                                                                                     | $  763,423 
      ========             | $   890,018 
      ========         
|                                                                                                                                         |                                        |                                     
|Earnings per share                                                                                                                       |                                        |                                     
|Basic - as reported                                                                                                                      | $         0.30                         | $         0.35                      
|Basic - pro forma                                                                                                                        | $         0.30                         | $         0.35                      
|                                                                                                                                         |                                        |                                     
|Diluted - as reported                                                                                                                    | $         0.30                         | $         0.34                      
|Diluted - pro forma                                                                                                                      | $         0.30                         | $         0.34                      

Page 12

8.  Acquisition of Solon-Anson Insurance Agency, Inc.

On September 29, 2004, the Bank's wholly owned subsidiary, Northeast
Financial Services, Inc ("NFS"), acquired 100% of the outstanding
stock of Solon-Anson Insurance Agency, Inc. ("Solon-Anson"),
headquartered in Rangeley, Maine. See the details of the purchase price below.
In connection with the acquisition, NFS entered into certain compensation
arrangements with the sellers. NFS purchased an annuity for $900,000 to provide
deferred compensation payments to the former owners, Craig and Sharon Sargent.
The annuity remains an asset of the Company and is included in other assets in
the consolidated balance sheet. These payments are contingent on meeting the
conditions of their respective employment contracts, and are subject to a
vesting schedule over the term of each employment contract. The acquisition of
Solon-Anson Insurance Agency used purchase accounting and resulted in a customer
list intangible asset of $2,081,500, which will be amortized over seven years.
No goodwill was recognized. The results of operations of Solon-Anson have been
included in the consolidated financial statements of the Company since the
acquisition date. There is no pro-forma disclosure included because Solon-Anson
was not considered a significant acquisition. There may be future purchase
accounting adjustments. The following is a summary of the assets and liabilities
acquired and allocation of the purchase price.

Purchase Price:

|Cash Paid         | $    993,469        
|----------------- | --------------------
|Debt Assumed      | $    683,104        
|Other Liabilities | $     
        6,743
|Deferred Taxes    | $    450,877        
|Total             | $ 2,134,193         
|                  |                     
|Allocation:       |                     
|Customer List     | $ 2,081,500         
|Office Equipment  | $      50,831       
|Other Assets      | $       
      1,862
|Total             | $ 2,134,193         

This transaction added six insurance offices located in Anson, Auburn,
Augusta, Mexico, Rangeley, and South Paris, Maine and 21,000 customers. This
acquisition is part of the Company's plans to enhance sources of fee income.

Page 13

Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition

This Management's Discussion and Analysis of Results of Operations and
Financial Condition presents a review of the results of operations for the three
and six months ended December 31, 2004 and 2003 and the financial condition at
December 31, 2004 and June 30, 2004. This discussion and analysis is intended to
assist in understanding the results of operations and financial condition of the
Company and the Bank. Accordingly, this section should be read in conjunction
with the consolidated financial statements and the related notes and other
statistical information contained herein. See Form 10-K dated as of June 30,
2004 for discussion of the critical accounting policies of the Company.

A Note about Forward Looking Statements

This report contains certain "forward-looking statements" within
the meaning of federal securities law Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934, such as statements
relating to our financial condition, prospective results of operations, future
performance or expectations, plans, objectives, prospects, loan loss reserve
adequacy, simulation of changes in interest rates, capital spending and finance
sources, and revenue sources. These statements relate to expectations concerning
matters that are not historical facts. Accordingly, statements that are based on
management's projections, estimates, assumptions, and judgments constitute
forward-looking statements. These forward looking statements, which are based on
various assumptions (some of which are beyond the Company's control), may be
identified by reference to a future period or periods, or by the use of
forward-looking terminology such as "believe", "expect",
"estimate", "anticipate", "continue",
"plan", "approximately", "intend", or other
similar terms or variations on those terms, or the future or conditional verbs
such as "will", "may", "should",
"could", and "would". In addition, the Company may from time
to time make such oral or written "forward-looking statements" in
future filings with the Securities and Exchange Commission (including exhibits
thereto), in its reports to shareholders, and in other communications made by or
with the approval of the Company.

Such forward-looking statements reflect our current views and expectations
based largely on information currently available to our management, and on our
current expectations, assumptions, plans, estimates, judgments, and projections
about our business and our industry, and they involve inherent risks and
uncertainties. Although we believe that these forward-looking statements are
based on reasonable estimates and assumptions, they are not guarantees of future
performance and are subject to known and unknown risks, uncertainties,
contingencies, and other factors. Accordingly, we can not give you any assurance
that our expectations will in fact occur or that our estimates or assumptions
will be correct. We caution you that actual results could differ materially from
those expressed or implied by such forward-looking statements due to a variety
of factors, including, but not limited to, those related to the economic
environment, particularly in the market areas in which the Company operates,
competitive products and pricing, fiscal and monetary policies of the U.S.
Government, changes in government regulations affecting financial institutions,
including regulatory fees and capital requirements, changes in prevailing
interest rates, acquisitions and the integration of acquired businesses, credit
risk management, asset/liability management, changes in technology, changes in
the securities markets, and the availability of and the costs associated with
sources of liquidity. Accordingly, investors and others are cautioned not to
place undue reliance on such forward-looking statements. For a more complete
discussion of certain risks and uncertainties affecting the Company, please see
"Item 1. Business - Forward-Looking Statements and Risk Factors" set
forth in our Form 10-K for the fiscal year ended June 30, 2004. These
forward-looking statements speak only as of the date of this report and we do
not undertake any obligation to update or revise any of these forward-looking
statements to reflect events or circumstances occurring after the date of this
report or to reflect the occurrence of unanticipated events.

Description of Operations

Northeast Bancorp (the "Company") is a Maine corporation and a bank
holding company registered with the Federal Reserve Bank of Boston
("FRB") under the Bank Holding Company Act of 1956. After completing
our charter conversion on August 30, 2004, the Federal Reserve Bank of Boston
became the primary regulator of the Company and it supervises and examines our
activities on a continual basis. The Company also is a registered Maine
financial institution holding company under Maine law and is subject to
regulation and examination by the Superintendent of Maine Bureau of Financial
Institutions. The Company's wholly-owned subsidiary is no longer a federal
savings and loan association subject to regulation by the Office of Thrift
Supervision. Its name changed to Northeast Bank. We conduct business from
our headquarters in Auburn, Maine and, as of December 31, 2004, we had 12 banking
offices and six insurance offices all located in Western and South-Central
Maine. At December 31, 2004, we had consolidated assets of $560.7 million and
consolidated stockholders' equity of $38.3 million.

Northeast Bancorp's principal asset is all the capital stock of Northeast
Bank (the "Bank"), a Maine state-chartered universal bank.
Accordingly, Northeast Bancorp's results of operations are primarily dependent
on the results of the operations of the Bank. The Bank has offices in Auburn,
Augusta, Bethel, Brunswick, Buckfield, Harrison, Lewiston, Lisbon Falls,
Mechanic Falls, Portland, and South Paris, Maine. The Bank's investment
brokerage division has an office in Falmouth, Maine from which investment,
insurance and financial planning products and services are offered.

On September 29, 2004, the Bank's wholly owned subsidiary, Northeast
Financial Services, Inc ("NFS"), acquired 100% of the outstanding
stock of Solon-Anson Insurance Agency, Inc. ("Solon-Anson"),
headquartered in Rangeley, Maine. See Note 8 to our consolidated financial
statement included herein for more information on this transaction. This
transaction added six insurance offices located in Anson, Auburn, Augusta,
Mexico, Rangeley, and South Paris, Maine and 21,000 customers. NFS also has an
insurance agency in our Bethel, Maine branch. All of our insurance offices offer
personal and commercial property and casualty insurance products.

Page 14

Bank Strategy

The principal business of the Bank consists of attracting deposits from the
general public and applying those funds to originate or acquire residential
mortgage loans, commercial loans, commercial real estate loans, and a variety of
consumer loans. The Bank sells residential mortgage loans into the secondary
market. The Bank also invests in mortgage-backed securities and securities
issued by agencies of the United States Government. The Bank's profitability
depends primarily on net interest income, which is the difference between
interest income earned from interest-earning assets (i.e. loans and investments)
and interest expense incurred on interest-bearing liabilities (i.e. customer
deposits and borrowed funds). The relative balances of interest-earning assets
and interest-bearing liabilities, and the rates paid on these balances affect
net interest income. The Bank emphasizes the growth of non-interest sources of
income from trust management, financial planning, and investment and insurance
brokerage to reduce its dependency on net interest income.

Our goal is to continue modest but profitable growth by increasing our loan
and deposit market share in our existing markets in Western and South-Central
Maine, closely managing the yields on earning assets and rates on
interest-bearing liabilities, introducing new financial products and services,
increasing the number of bank services sold to each household, increase
non-interest income from expanded trust, investment and insurance brokerage
services, and controlling the growth of non-interest expenses. It also is part
of our business strategy to make targeted acquisitions in our current market
areas from time to time when opportunities present themselves. As a continuation
of our growth plans, the Bank also plans to open a new retail banking branch in
Windham, Maine in 2005; one of the most rapidly growing communities in Southern
Maine.

The Company's profitability is affected by the Bank's interest rate spread,
which is the difference between the average yield earned on its interest-earning
assets and the average rate paid on its interest-bearing liabilities. The level
of the provision for loan losses, non-interest income and expenses of Northeast
Bancorp and the Bank, and the effective tax rate also affect profitability.
Non-interest income consists primarily of loan and deposit service fees; trust,
investment brokerage and insurance brokerage fees; and gains on the sales of
loans and investments. Non-interest expenses consist of compensation and
benefits, occupancy related expenses, deposit insurance premiums paid to the
FDIC, and other operating expenses, which include advertising, computer
services, supplies, telecommunication, and postage expenses.

Results of Operations

Comparison of the Three and Six Months Ended December 31, 2004 and 2003

General

The Company reported consolidated net income of $764,882, or $0.30 per
diluted share for the three months ended December 31, 2004 compared with $890,
018, or $0.34 per diluted share for the three months ended December 31, 2003, a
decrease of $125,136, or 14%. Net income for the quarter ended December 31, 2004
included an after-tax charge of $269,789 or $0.10 per diluted share from the
write-off of the unamortized deferred costs related to NBN Capital Trust
preferred securities which were redeemed on December 31, 2004. Net interest
income increased $597,265, or 15%, primarily from 17% higher average earning
assets. Non-interest income increased $180,908, or 15%, from increased insurance
commissions partially offset by decreased investment commissions, net security
gains, gains on sales of loans, fees and service charges on loans and other
services to customers, and lower BOLI income. The provision for loan losses
increased $59,182, or 25%, compared to the three months ended December 31, 2003,
due to the increase in charge-offs and the increased volume of commercial and
consumer indirect loans, both which carry a higher credit risk. Non-interest
expense increased $928,931, or 26%, primarily from higher salary and benefit
expense and the write-off of unamortized deferred costs. Full-time equivalent
staff increased by 16 as of the quarter ended December 31, 2004 to 197 compared
to the same period last year, all from the Solon Anson Insurance Agency
acquisition ("Solon Anson"). Net interest income continues to be our
largest source of revenue, and is affected by the level of interest rates,
changes in interest rates and by changes in the amount and composition of
interest-earning assets and interest-bearing liabilities.

Annualized return on average equity ("ROE") and return on average
assets ("ROA") were 7.89% and 0.54%, respectively, for the quarter
ended December 31, 2004 and were 9.66% and 0.74%, respectively, for the quarter
ended December 31, 2003. The decrease in the return on average equity was due to
lower net income for the current quarter. The return on average assets decreased
due to lower net income and from higher average assets compared to the quarter
ended December 31, 2003.

Net income for the six months ended December 31, 2004 was $1,720,997, or
$0.67 per diluted share, as compared to $1,806,399, or $0.69 per diluted share,
for the same period one year ago. The results for the six months ended December
31, 2004 was impacted by increased net interest income from higher average
earning assets, decreased non-interest income due to decreased gains on the sale
of loans, net securities gains, and loan servicing fees partially offset by
increased investment and insurance commission revenue, and increased
non-interest expense from the impact of staff additions from Solon Anson and
higher compensation from the increase in commission revenue.

ROE and ROA were 8.98% and 0.62%, respectively, for the six months ended
December 31, 2004 and 9.78% and 0.76% for the six months ended December 31,
2003. The decline in ROE was primarily due to a decrease in net income. The
decline in ROA was due to a decrease in net income and an increase in average
assets.

Page 15

Net Interest Income

Net interest income for the three months ended December 31, 2004 increased
$597,265 compared to the same period in 2003. The increase in net interest
income was due to higher average earning assets, increasing $78,768,450, or 17%,
for the quarter ended December 31, 2004 as compared to the quarter ended
December 31, 2003. The increase in earning assets was primarily due to an
increase in loan volume of $65,673,952, or 17%, and the purchase of government
agency, government sponsored entities, and mortgage-backed securities, up
$11,687,115 or 21%. Average loans as a percentage of average earning assets was
86%, respectively, for quarters ended December 31, 2004 and 2003. Net interest
margin was 3.37% and 3.43% for the period ended December 31, 2004 and 2003,
respectively. Net interest spread for the three months ended December 31, 2004
was 3.16%, a decrease of 4 basis points from 3.20% for the same period a year
ago. Comparing the three months ended December 31, 2004 and 2003, the yields on
earning assets declined 9 basis points compared to a 5 basis point decrease in
the cost of interest-bearing liabilities. From September 30, 2004 to December
31, 2004, the yield on earning assets increased 14 basis points to 5.98%
primarily from increases in prime rate during the period. However, this yield on
earning assets remained below the 6.07% yield at December 31, 2003. Similarly, the cost of
interest-bearing liabilities also continued to increase from September 30, 2004
to December 31, 2004 by 3 basis points to 2.82%. This cost of  interest-bearing
liabilities was below the December 31, 2003 cost of 2.87%.

The changes in net interest income are presented in the schedule below, which
compares the three months ended December 31, 2004 and 2003.

|                                                                                                                                                          | Difference Due to              |                               
|--------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------ | ------------------------------
|                                                                                                                                                          | Volume                         | Rate                          
|Investments                                                                                                                                               | $   119,080                    | $    38,551                   
|Loans, net                                                                                                                                                | 1,045,027                      | (133,453)                     
|FHLB & Other Deposits                                                                                                                                     | 1,941  
    _____________      | 8,935  
    _____________     
|Total Interest-earnings Assets                                                                                                                            | 1,166,048                      | (85,967)                      
|                                                                                                                                                          |                                |                               
|Deposits                                                                                                                                                  | 462,834                        | 77,393                        
|Repurchase Agreements                                                                                                                                     | 15,061                         | 6,684                         
|Borrowings                                                                                                                                                | 24,683  
    _____________     | (103,839) 
    _____________  
|Total Interest-bearing Liabilities                                                                                                                        | 502,578  
    _____________    | (19,762) 
    _____________   
|Net Interest Income                                                                                                                                       | $   663,470  
    ============ | $   (66,205) 
    ============
|Rate/Volume amounts spread proportionately between volume and rate.
    Borrowings in the table include junior subordinated debt and FHLB
    borrowings.

Net interest income for the six months ended December 31, 2004 increased
$1,265,897 compared to the same period in 2003. The increase in net interest
income was due to higher average earning assets, increasing $78,630,065, or 18%,
for the six months ended December 31, 2004 as compared to the six months ended
December 31, 2003. The increase in earning assets was primarily due to an
increase in loans of $61,526,174, or 16%, and the purchase of government agency
and mortgage-backed securities, up $16,883,368 or 33%, as part of a leveraging
program to increase net interest income. This leveraging program was completed
at June 30, 2004. Average loans, as a percentage of average earning assets was
85% and 86% for the six months ended December 31, 2004 and 2003, respectively.
Net interest margin was 3.32% and 3.35% for the period ended December 31, 2004
and 2003, respectively. Net interest spread for the six months ended December
31, 2004 was 3.11%, an increase of 1 basis point from 3.10% for the same period
a year ago. Comparing the six months ended December 31, 2004 and 2003, the
yields on earning assets declined 14 basis points compared to a 15 basis point
decrease in the cost of interest-bearing liabilities. The yield
on earning assets decreased through June 30, 2004. The increases in prime rate
from June 30, 2004 to December 31, 2004 have increased the yield on earning
assets to an average of 5.91%. Similarly, the cost of interest-bearing liabilities also continued to
decrease through June 30, 2004, then increased through December 31, 2004 to an
average of 2.80%. The increase in the cost of interest-bearing liabilities lagged the
increase in the yield on earning assets, improving slightly the net interest
spread compared to December 31, 2003.

Page 16

The changes in net interest income are presented in the schedule below, which
compares the six months ended December 31, 2004 and 2003.

|                                                                                                                                                          | Difference Due to               |                                
|--------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------- | -------------------------------
|                                                                                                                                                          | Volume                          | Rate                           
|Investments                                                                                                                                               | $    332,368                    | $    136,104                   
|Loans, net                                                                                                                                                | 1,940,947                       | (403,724)                      
|FHLB & Other Deposits                                                                                                                                     | (172) 
    _____________        | 11,429  
    _____________     
|Total Interest-earnings Assets                                                                                                                            | 2,273,143                       | (256,191)                      
|                                                                                                                                                          |                                 |                                
|Deposits                                                                                                                                                  | 942,412                         | (42,294)                       
|Repurchase Agreements                                                                                                                                     | 23,063                          | 12,085                         
|Borrowings                                                                                                                                                | 31,322  
    _____________      | (215,533) 
    _____________   
|Total Interest-bearing Liabilities                                                                                                                        | 996,797  
    _____________     | (245,742) 
    _____________   
|Net Interest Income                                                                                                                                       | $  1,276,346  
    ============ | $    (10,449) 
    ============
|Rate/Volume amounts spread proportionately between volume and rate.
    Borrowings in the table include junior subordinated debt and FHLB
    borrowings.

The Company's business primarily consists of the commercial banking
activities of the Bank. The success of the Company is largely dependent on its
ability to manage interest rate risk. This is the sensitivity of income to
changes in interest rates. Changes in interest rates, as well as fluctuations in
the level of assets and liabilities, affect net interest income. This risk
arises from our core banking activities, lending and deposit gathering. In
addition to directly impacting net interest income, changes in interest rates
can also affect the amount of loans originated and sold by the Bank, the ability
of borrowers to repay adjustable or variable rate loans, the average maturity of
loans, the rate of amortization of premiums and discounts paid on securities,
the amount of unrealized gains and losses on securities available for sale and
the fair value of our saleable assets and the resultant ability to realize
gains. The Bank has maintained an asset sensitive position based on its own
internal analysis which categorizes its core deposits as long term liabilities
which are then matched to long term assets. As a result, the Bank is generally
expected to experience an improvement in its net interest margins during a
period of increasing interest rates.

As of December 31, 2004 and 2003, 51% and 49%, respectively, of the Bank's
loan portfolio was composed of adjustable rate loans based on a prime rate index
or short-term rate indices such as the one-year Treasury bill. Interest income
on these existing loans will increase as short-term interest rates increase. An
increase in short-term interest rates will also increase deposit and FHLB
advance rates, increasing the Company's interest expense. Although the Bank has
experienced some net interest margin decrease, the impact on future net interest
income will depend on, among other things, actual rates charged on the Bank's
loan portfolio, deposit and advance rates paid by the Bank and loan volume.

Provision for Loan Losses

The provision for loan losses for the three months ended December 31, 2004
was $299,984, an increase of $59,182, or 25%, from $240,802 for the three months
ended December 31, 2003. For the six months ended December 31, 2004 and 2003, we
provided $600,121 and $480,802 for loan losses, respectively. The higher
provision was primarily due to higher net charge-offs, $133,983 for the three
months ended December 31, 2004 compared to $125,211 for the same period in 2003,
and $259,121for the six months ended December 31, 2004 compared to $158,802 for
the six months ended December 31, 2003, and the increase in the aggregate volume
of commercial and consumer loans. See Financial Condition for discussion of the
Allowance for Loan Losses for the factors impacting the provision for loan
losses. The allowance as a percentage of outstanding loans increased to 1.07% at
December 31, 2004 compared to 1.06% at June 30, 2004.

Noninterest Income

Total non-interest income was $1,427,851 for the three months ended December
31, 2004, an increase of $180,908, or 15%, from $1,246,943 for the three months
ended December 31, 2003. This increase was the combined impact of a $260,288
increase in investment and insurance commissions resulting primarily from the
Solon-Anson acquisition, $32,055 increase in other non-interest income from
increased trust fee revenue, and an $11,110 increase in fees and service charges
on loans and other services. These increases in other non-interest income were
partially offset by $19,388 decrease in loan servicing fees from the write-down
of mortgage servicing rights to its fair value, $41,768 lower net securities and
trading gains from lower security sales and trading volume, $42,784 lower gains
on sale of residential real estate loans from lower loan sales volume, and
$18,605 decrease in the cash surrender value of bank owned life insurance (BOLI)
from the annual resetting of interest rates in September 2004. We expect gains
on the sales of residential real estate loans to decrease for fiscal 2005
because origination volume will be approximately 40% lower than fiscal 2004.

Total non-interest income was $2,591,789 for the six months ended December
31, 2004, a decrease of $153,366, or 6%, from $2,745,155 for the six months
ended December 31, 2003. This decrease was the combined impact of a $21,310
decrease in fees and service charges on loans and other services, $90,924 lower
net securities and trading gains from lower security sales and trading volume,
$75,120 lower loan servicing fees primarily from the write-down of mortgage
servicing rights to its fair value, $422,046 lower gains on sale of residential
real estate loans from lower loan sales volume, and $28,868 decrease in the cash
surrender value of bank owned life insurance (BOLI) from the annual resetting of
interest rates in September 2004. These decreases in other non-interest income
were partially offset by a $367,589 increase in investment and insurance
commissions from higher sales volume and the insurance commission revenue from
Solon Anson, and $117,313 increase in other non-interest income primarily from
the realized gain on sale of the former Richmond branch building of $63,472 and
increase trust fee revenue of $30,748.

Page 17

Non-interest Expense

Total non-interest expense for the three months ended December 31, 2004 was
$4,534,355 an increase of $928,931, or 26%, from $3,605,424 for the three months
ended December 31, 2003. This increase was primarily due to increased salaries
and employee benefits of $324,973 from an additional 17 full-time equivalent
employees from the Solon Anson. Net occupancy expense increased from the lease
expense for the headquarters building and the land for the new Windham branch in
addition to the lease expense from four Solon Anson offices. Solon Anson also
accounted for the increase in equipment expense and intangible asset
amortization. The write-off of the $392,249 unamortized deferred cost associated
with the redeemed 9.60% trust preferred securities was included in other expense
and is the primary cause of the variance to the quarter ended December 31, 2003.
Other expense variance of $485,509 also includes other-than-temporary
write-downs on marketable and non-marketable equity securities of $13,587, a
receivable write-off of $20,595, increases in professional fees of $28,364, and
increased third-party processing charges of $17,719.

Total non-interest expense for the six months ended December 31, 2004 was
$8,288,169 an increase of $1,154,854, or 16%, from $7,133,315 for the six months
ended December 31, 2003. This increase primarily due to increased salaries and
employee benefits of $601,133 from the increase of 17 full-time equivalent
employees from Solon Anson and higher commissions paid to the investment
brokerage division on higher sales volume compared to the six months ended
December 31, 2003. Intangible asset amortization decreased $11,803 due to a
deposit intangible asset becoming fully amortized at June 30, 2004. Included in
other expense increase of $481,733 was the above December write-off of
unamortized deferred cost, increased professional fees of $37,193, outsourced
processing services for item processing, trust and internet banking increased
$30,374, and increased dues and assessments of $23,867.

For the three months and six months ended December 31, 2004 and 2003, the
decrease in income tax expense was primarily due to the decrease in income
before income taxes as compared to 2003.

Our efficiency ratio was 76% and 70% for the three months ended December 31,
2004 and 2003, respectively, and 73% and 69% for the six months ended December
31, 2004 and 2003, respectively.

Financial Condition

Our consolidated assets were $560,727,617 and $538,753,900 as of December 31,
2004 and June 30, 2004, respectively, an increase of $21,973,717, or 4%. The
increase in assets was primarily due to a net increase in loans. The increases
in assets were funded with deposits, securities sold under repurchase
agreements, increases in FHLB advances, and junior subordinated debentures. For
the six months ended December 31, 2004, total average assets were $554,413,164,
an increase of $80,816,575, or 17%, from $473,596,589 for the same period last
year. This asset increase was primarily loans resulting from opportunities in
our market areas to meet the needs of under-served residential real estate and
commercial real estate customers and automobile dealers.

Total stockholders' equity was $38,309,770 and $36,453,020 at December 31,
2004 and June 30, 2004, respectively, an increase of $1,856,750, or 5%, due to
net income for the six months ended December 31, 2004 and increase in
accumulated other comprehensive income partially offset by stock repurchases and
dividends. The book value per outstanding share was $15.24 at December 31, 2004
and $14.43 at June 30, 2004.

Investment Activities

The investment portfolio was $66,225,553 as of December 31,
2004, a decrease of $1,245,591 from $67,471,144 as of June 30, 2004. The
investment portfolio as of December 31, 2004 consisted of government agency,
government sponsored entities, corporate debt, and mortgage-backed securities,
and equity securities. Generally, funds retained by the Bank as a result of
increases in deposits or decreases in loans, which are not immediately used by
the Bank, are invested in securities held in its investment portfolio. The
investment portfolio is used as a source of liquidity for the Bank. The
investment portfolio is structured so that it provides for an ongoing source of
funds for meeting loan and deposit demands and for reinvestment opportunities to
take advantage of changes in the interest rate environment.The investment portfolio averaged $67,394,424 for the six months ended
December 31, 2004 as compared to $50,509,159 for the six months ended December
31, 2003, an increase of $16,885,265 or 33%. This increase was due primarily to
purchasing government agency and mortgage-backed securities to increase eligible
collateral pledged to the Federal Home Loan Bank of Boston.

Our entire investment portfolio is classified as available for sale at
December 31, 2004 and June 30, 2004, and is carried at market value. Changes in
market value, net of applicable income taxes, are reported as a separate
component of shareholders' equity. Gains and losses on the sale of securities
are recognized at the time of the sale using the specific identification method.
The amortized cost and market value of available for sale securities at December
31, 2004 was $66,740,016 and $66,225,553, respectively. The difference between
the carrying value and the cost of the securities of $514,463 was primarily
attributable to the market value of U. S. government agencies, government
sponsored entities, and mortgage-backed securities below their cost. The net
unrealized gain on equity securities was $82,899 and the net unrealized loss on
government agency, government sponsored entities, corporate debt, and
mortgage-backed securities was $597,362 at December 31, 2004. The government
agency, government sponsored entities, and mortgage-backed securities have
decreased in market value due to the recent increases in the interest rates
compared to June 30, 2004. Substantially all of the government agency,
government sponsored entities, and mortgage-backed securities held in our
portfolio are high investment grade, federal agency securities. Management
believes that the yields currently received on this portfolio are satisfactory.
Management reviews the portfolio of investments on an ongoing basis to determine
if there has been any other than temporary declines in value. Some of the
considerations management makes in the determination are market valuations of
particular securities and economic analysis of the securities' sustainable
market values based on the underlying company's profitability. Management also
plans to hold the equity, government agency, government sponsored entities, and
mortgage-backed securities for the foreseeable future, or until a recovery of
market value.

Page 18

Loan Portfolio

Total loans of $458,110,904 as of December 31, 2004 increased $25,516,556 or
6%, from $432,594,348 as of June 30, 2004. Compared to June 30, 2004, all loan
categories increased. Aggregate commercial real estate and commercial loans
increased $6,724,848, or 3%, compared to June 30, 2004. The increase in
commercial loans was due to new opportunities with small businesses within our
market areas and expansion of the lending staff. For the six months ended
December 31, 2004, consumer loans increased $4,134,774, or 5%. This increase in
consumer loans was due to origination of indirect recreational vehicle and
indirect auto loans. The residential real estate loan portfolio, which is
comprised of purchased loans, residential real estate loans originated for
portfolio, and commercial real estate 1 to 4 family loans, increased by
$11,018,377, or 8% compared to June 30, 2004. Construction loans increased
$3,757,110 or 45%. Net deferred loan origination fees decreased $118,553. The
total loan portfolio averaged $446,683,321 for the six months ended December 31,
2004, an increase of $63,018,160, or 16%, from the six months ended December 31,
2003.

The Bank primarily lends within its local market areas, which management
believes helps them to better evaluate credit risk. The Bank's loan portfolio as
of December 31, 2004 has changed with increases in residential real estate,
commercial real estate, commercial loans, and consumer loans when compared to
June 30, 2004. The Bank's local market, as well as the secondary market,
continues to be very competitive for loan volume. The local competitive
environment and customer response to favorable secondary market rates will have
an adverse affect on the Bank's ability to increase the loan portfolio.

Residential real estate loans consisting of primarily
owner-occupied residential loans as a percentage of total loans were 33%, 32%
and 32% as of December 31, 2004, June 30, 2004, and December 31, 2003,
respectively. The variable rate product as a percentage of total residential
real estate loans was 42%, 37% and 35% for the same periods, respectively.
Generally, management has pursued a strategy of increasing the percentage of
variable rate loans as a percentage of the total loan portfolio to help manage
interest rate risk. We have sold virtually all of the newly originated
fixed-rate residential real estate loans also to manage interest rate risk. We
currently plan to continue to sell all newly originated 15-year and 30-year
fixed-rate residential real estate loans into the secondary market. Average
residential real estate mortgages of $144,325,283 for the six months ended
December 31, 2004 increased $19,180,225, or 15%, from the six months ended
December 31, 2003. This increase was due to originating more adjustable rate
residential real estate loans, which are held in portfolio, than fixed rates.
Also, the volume of residential real estate loan originations has decreased to
$20.2 million for the six months ended December 31, 2004 compared to $34.5
million for the same period one year ago. This origination volume is expected to
decrease as interest rates increase. Purchased loans included in this portfolio
are pools of residential real estate loans acquired from other financial
institutions that were sold with the servicing retained. In the past, the Bank
has purchased these loan pools as an alternative to mortgage-backed securities.
The Bank has not recently pursued a similar strategy.

Commercial real estate loans as a percentage of total loans were 27%, 30%,
and 28% as of December 31, 2004, June 30, 2004 and December 31, 2003,
respectively. Commercial real estate loans have minimal interest rate risk
because the portfolio consists primarily of variable rate products. The variable
rate products as a percentage of total commercial real estate loans were 96%,
93% and 93% for the same periods respectively. The Bank tries to mitigate credit
risk by lending in its market area as well as maintaining a well-collateralized
position in real estate. Average commercial real estate loans of $125,606,916
for the six months ended December 31, 2004 increased $21,057,405, or 20%, from
the same period in 2003. The increase in commercial real estate loans reflects
the sales efforts of additional commercial lending staff in the Bank's existing
business markets.

Construction loans as a percentage of total loans were 3%, 2%, 2% as of
December 31, 2004, June 30, 2004 and December 31, 2003, respectively. Limiting
disbursements to the percentage of construction completed controls risk. An
independent consultant or appraiser verifies the construction progress.
Construction loans have maturity dates less than one year. The variable rate
products as a percentage of total construction loans were 61%, 73%, and 47% for
the same periods respectively. Average construction loans were $10,329,195 and
$6,955,127 for the six months ended December 31, 2004 and 2003, respectively, an
increase of $3,374,068 or 49%.

Commercial loans as a percentage of total loans were 16%, 15%, and 17% as of
December 31, 2004, June 30, 2004 and December 31, 2003, respectively. The
variable rate products as a percentage of total commercial loans were 59%, 57%,
and 63% for the same periods respectively. The repayment ability of commercial
loan customers is highly dependent on the cash flow of the customer's business.
The Bank mitigates losses by strictly adhering to the Company's underwriting and
credit policies. Average commercial loans of $68,866,510 for the six months
ended December 31, 2004 increased $4,071,073, or 6%, from $64,795,437 for the
same period in 2003.

Page 19

Consumer and other loans as a percentage of total loans were 21%, 21%, and
21% for the periods ended December 31, 2004, June 30, 2004, and December 31,
2003, respectively. At December 31, 2004, indirect auto, indirect recreational
vehicle, and indirect mobile home loans represented 32%, 26%, and 36% of total
consumer loans, respectively, compared to 32%, 22%, and 40% of total consumer
loans at June 30, 2004. Since these loans are primarily fixed rate products,
they have interest rate risk when market rates increase. The consumer loan
department underwrites all the indirect automobile and recreational vehicle
loans and mobile home loans to mitigate credit risk. The Bank typically pays a
nominal one-time origination fee on indirect loans. The fees are deferred and
amortized over the life of the loans as a yield adjustment. Management attempts
to mitigate credit and interest rate risk by keeping the products with average
lives of no longer than five years, receiving a rate of return commensurate with
the risk, and lending to individuals in the Bank's market areas. Average
consumer and other loans were $94,978,215 and $79,654,308 for the six months
ended December 31, 2004 and 2003, respectively. The $15,323,907, or 19%,
increase was due primarily to increased indirect recreational vehicle and
indirect auto lending. The composition of consumer loans is detailed in the
following table.

|                    
|--------------------
|                    
|                    
|Indirect Auto       
|Indirect RV         
|Indirect Mobile Home
|Subtotal Indirect   
|Other               
|Total               

Classification of Assets

The Bank had non-performing loans totaling $1,780,000 and $1,677,000 at
December 31, 2004 and June 30, 2004, respectively, or 0.39% and 0.39% of total
loans, respectively. The Bank's allowance for loan losses was equal to 276% and
273% of the total non-performing loans at December 31, 2004 and June 30, 2004,
respectively. The following table represents the Bank's non-performing loans as
of December 31, 2004 and June 30, 2004, respectively:

|Description             | December 31, 2004               | June 30,2004                    
|----------------------- | ------------------------------- | --------------------------------
|Residential Real Estate | $    272,000                    | $    214,000                    
|Commercial Real Estate  | 871,000                         | 920,000                         
|Commercial Loans        | 353,000                         | 442,000                         
|Consumer and Other      | 284,000                         | 101,000                         
|Total non-performing    | $  1,780,000  
      ========== | $  1,677,000  
      ===========

Allowance for Loan Losses

Management does not believe that the increase in non-performing residential
real estate and consumer and other loans as of December 31, 2004 was indicative
of a trend. At December 31, 2004, the Bank had $425,000 in loans classified
special mention or substandard that management believes could potentially become
non-performing due to delinquencies or marginal cash flows. These substandard
loans increased by $25,000 when compared to the $400,000 at June 30, 2004. The
Bank's delinquent loans, as a percentage of total loans, increased at December
31, 2004 compared to June 30, 2004.

The following table reflects the quarterly trend of total delinquencies 30
days or more past due and non-performing loans for the Bank as a percentage of
total loans:

|12-31-04 | 09-30-04 | 06-30-04 | 03-31-04
|-------- | -------- | -------- | --------
|0.87%    | 0.97%    | 0.66%    | 0.58%   

At December 31, 2004, loans classified as non-performing included
approximately $843,000 of loan balances that are current and paying as agreed.
The Bank maintains the loans as non-performing until the borrower has
demonstrated a sustainable period of performance. Excluding these loans, the
Bank's total delinquencies 30 days or more past due, as a percentage of total
loans, would be 0.69% as of December 31, 2004.

Page 20

The Bank's allowance for loan losses was $4,918,000 as of December 31, 2004
as compared to $4,577,000 as of June 30, 2004, representing 1.07% and 1.06% of
total loans for each of the periods. Management maintains an allowance at a
level that they believe is reasonable for the overall risk inherent in the loan
portfolio. The factors considered include the increasing volume of commercial
and consumer loans, the increase in non-performing loans, the increase in net
charge offs compared to the six months ended December 31, 2003, the
deteriorating trend of internal risk ratings, and limited, but increasing,
credit concentrations.

The allowance for loan losses represents management's estimate of probable
losses inherent in the loan portfolio. This evaluation process is subject to
numerous estimates and judgments. The frequency of default, risk ratings, and
the loss recovery rates, among other things, are considered in making this
evaluation, as are the size and diversity of individual large credits. Changes
in these estimates could have a direct impact on the provision and could result
in a change in the allowance. The larger the provision for loan loss, the
greater the negative impact on our net income. Larger balance, commercial and
commercial real estate loans representing significant individual credit
exposures are evaluated based upon the borrower's overall financial condition,
resources, and payment record; the prospects for support from any financially
responsible guarantors; and, if appropriate, the realizable value of any
collateral. The allowance for loan losses attributed to these loans is
established through a process that includes estimates of historical and
projected default rates and loss severities; internal risk ratings; and
geographic, industry, and other environmental factors. Management also considers
overall portfolio indicators, including trends in internally risk-rated loans,
classified loans, non accrual loans, and historical and forecasted write-offs;
and a review of industry, geographic, and portfolio concentrations, including
current developments. In addition, management considers the current business
strategy and credit process, including credit limit setting and compliance,
credit approvals, loan underwriting criteria, and loan workout procedures.
Within the allowance for loan losses, amounts are specified for larger-balance,
commercial and commercial real estate loans that have been individually
determined to be impaired. These specific reserves consider all available
evidence, including, as appropriate, the present value of the expected future
cash flows discounted at the loan's contractual effective rate and the fair
value of collateral. Each portfolio of smaller balance, residential real estate
and consumer loans, is collectively evaluated for impairment. The allowance for
loan losses is established via a process that includes historical delinquency
and credit loss experience, together with analyses that reflect current trends
and conditions. Management also considers overall portfolio indicators including
historical credit losses; delinquent, non-performing and classified loans;
trends in volumes; terms of loans; an evaluation of overall credit quality and
the credit process, including lending policies and procedures; and economic
factors. For the six months ended December 31, 2004, we have not changed our
approach in the determination of the allowance for loan losses. There have been
no material changes in the assumptions or estimation techniques as compared to
prior periods in determining the adequacy of the allowance for loan losses.

Management believes that the allowance for loan losses is adequate
considering the level of risk in the loan portfolio. While management believes
that it uses the best information available to make its determinations with
respect to the allowance, there can be no assurance that the Company will not
have to increase its provision for loan losses in the future as a result of
changing economic conditions, adverse markets for real estate or other factors.
In addition, various regulatory agencies, as an integral part of their
examination process, periodically review the Bank's allowance for loan losses.
These agencies may require the Bank to recognize additions to the allowance for
loan losses based on their judgments about information available to them at the
time of their examination. The Bank's most recent joint examination by the
Federal Reserve Bank of Boston and the Maine Bureau of Financial Institutions
was completed in November 2004. At the time of the examination the regulators
proposed no adjustments to the allowance for loan losses.

Other Assets

Bank owned life insurance (BOLI) was purchased on December 31, 2002. BOLI was
invested in the general account of two quality insurance companies. Standard and
Poor's rated these companies AA+ or better at November 18, 2004. Interest
earnings increase the cash surrender value. These interest earnings are based on
interest rates reset each year, subject to minimum interest rates. The increases
in cash surrender value offsets a portion of employee benefit costs. These
increases were recognized in other income and are not subject to income taxes.
Borrowing on or surrendering the policy may subject the Bank to income tax
expense on the increase in cash surrender value. For these reasons, management
considers BOLI an illiquid asset. BOLI represented 18% of Company's capital plus
the allowance for loan losses at December 31, 2004.

Intangible assets of $2,289,260 as of December 31, 2004 increased $1,960,367
from $328,893 as of June 30, 2004 from the customer list intangible recognized
in the Solon-Anson Insurance Agency acquisition. See Note 8 of our consolidated
financial statements included herein for more information on the acquisition.

Page 21

Capital Resources and Liquidity

The Bank continues to attract new local deposit relationships. As alternative
sources of funds, the Bank utilizes brokered certificates of deposit
("CD's") and FHLB advances when their respective interest rates are
less than the interest rates on local market deposits. Brokered CD's carry the
same risk as local CD's, in that both are interest rate sensitive with respect
to the Bank's ability to retain the funds. Brokered CD's are used to supplement
the growth in earning assets. FHLB advances are also used to fund short-term
liquidity demands.

Total deposits of $382,252,365 as of December 31, 2004 increased $4,432,636,
or 1%, from $377,819,729 as of June 30, 2004. NOW accounts and certificates of
deposits increased $208,931 and $23,495,125, respectively, during the six months
ended December 31, 2004. Demand deposits accounts, money market accounts and
regular savings decreased $979,655, $1,315,033, and $731,937, respectively, for
the same period. Certificates of deposits increased from successful promotions
of an 18 and 24 month certificates of deposit and the winning bid on a jumbo
certificate of deposit from a Maine governmental agency. Management's continuing
strategy has certificate of deposit rates for maturities two years and less near
the top of the market to attract new deposit account relationships. Brokered
certificates of deposit decreased $16,244,795 as maturing balances were repaid
during the six months ended December 31, 2004. Funding from brokered deposits is
limited by policy to 25% of total assets.

Total average deposits of $390,721,012 for the six months ended December 31,
2004 increased $73,675,780, or 23%, compared to the average for the six months
ended December 31, 2003. The increase in total average deposits compared to
December 31, 2003 is net of a $4,011,095 or 12% increase in average demand
deposits, $4,635,078 or 7% increase in average NOW accounts, $1,964,702 or 12%
increase in average money market accounts, and $1,317,491 or 5% increase in
average regular savings accounts. All interest-bearing non-maturing deposit
accounts have market interest rates. Generally, the increase in these
non-maturing deposits resulted from promotion of NOW accounts combined with
advertising campaign of other transaction accounts and employee incentive
programs to increase the sale of non-maturing deposit accounts. Increasing
non-maturing deposits is a strategic focus in fiscal 2005. These deposits
generally have lower interest rates and would result in a decrease in our cost
of funds. Average brokered certificates of deposit increased $55,121,417 or 141%
to $94,141,702 for the six months ended December 31, 2004. This increase
reflects our use of brokered certificates of deposits as an alternative to FHLB
advances to fund the increase in our earning assets. The weighted average
maturity for the brokered certificates of deposit was approximately 1.4 years.
Average regular certificates of deposit increased $6,625,997, or 5%, to
$144,253,311 for the six months ending December 31, 2004. Even though deposit
interest rates have remained competitive, the rates of return are potentially
higher with other financial instruments such as mutual funds and annuities. Like
other companies in the banking industry, the Bank will be challenged to maintain
or increase its core deposits.

Securities sold under repurchase agreements were $35,043,909 as of December
31, 2004, an increase of $10,159,040, or 41%, from $24,884,869 as of June 30,
2004. This increase reflects additional funds deposited by existing customers.
Market interest rates are offered on this product. Average securities sold under
repurchase agreements were $30,086,865 for the six months ended December 31,
2004, an increase of $3,939,130, or 15%, compared to the average for the six
months ended December 31, 2003.

Advances from the Federal Home Loan Bank (FHLB) were $85,199,648 as of
December 31, 2004, an increase of $2,222,014, or 3%, from $82,977,634 as of June
30, 2004. The Bank's current advance availability, our unused borrowing capacity
subject to the satisfaction of certain conditions, is approximately $3,914,000
over and above the December 31, 2004 outstanding advances and the FHLB Idealway
account line of credit. For the six months ended December 31, 2004, we had
pledged government agency and mortgage-backed securities of $18,844,101 as
collateral for FHLB advances. We plan to continue to purchase additional
government agency and mortgage-backed securities to pledge as collateral for
advances. These purchases will be funded from the cash flow from mortgage-backed
securities and residential real estate loans principal and interest payments,
and additional purchases of brokered certificates of deposit. Newly originated
adjustable residential real estate loans will be held in portfolio and will
qualify as collateral. In addition to government agency and mortgage-backed
securities, residential real estate loans, certain commercial real estate loans,
and certain FHLB deposits free of liens, pledges and encumbrances are required
to be pledged to secure FHLB advances. Average advances from the FHLB were
$78,202,484 for the six months ended December 31, 2004, a decrease of
$5,434,161, or 7%, compared to $83,636,645 average for the same period last
year.

In December 2003, the Company created NBN Capital Trust II and NBN Capital
Trust III for the issuance of junior subordinated notes totaling $6,000,000. NBN
Capital Trust II issued $3,000,000 of junior subordinated notes with a variable
interest rate based on three month LIBOR plus 2.80% and reprices quarterly. The
interest rate was 4.78% for the quarter ended December 31, 2004. NBN Capital
Trust III also issued $3,000,000 of junior subordinated notes with a fixed
interest rate of 6.50% until March 30, 2009, when the interest rate will become
variable based on three month LIBOR. The Company has a call option, which can be
first exercised on March 30, 2009. These funds were used to fund the growth in
earning assets.

The Company exercised its option to redeem the securities issued by NBN
Capital Trust on December 31, 2004. This call retired the junior subordinated
debentures of $7,394,849 originally issued on November 23, 1999 with an interest
rate of 9.60%. This resulted in recognizing a loss of $392,294 ($269,789 after
income taxes), from expensing the unamortized deferred costs related to this
issue. This redemption was financed, in part, from the issuance of a new junior
subordinated debt offering through NBN Capital Trust IV.

NBN Capital Trust IV was created in December 2004 and sold $10,000,000 in
trust preferred securities in a private placement offering. NBN Capital Trust IV
then purchase from the Company junior subordinated notes totaling $10,000,000
with a fixed rate of 5.88% for the first five year. After five years, the
interest rate becomes variable based on three month LIBOR. The Company has the
option to redeem the trust preferred securities on or after February 23, 2010.
See Note 2 for more information on NBN Capital Trust IV and the related junior
subordinated debt.

Page 22

In addition to the traditional retail products, the Bank has the ability to
access funds from a line of credit of $15 million established through the
Borrower-In-Custody program with the Federal Reserve Discount Window, maturing
securities and loans, the sale of securities and loans, repurchase agreements,
and brokered deposits which the Bank has unsued capacity of approximately $59
million under its policy limitation of 25% of total assets. Management believes
that the Company's available liquidity resources are sufficient to support the
Company's needs.

The 2004 Stock Repurchase Plan replaced a temporary stock repurchase plan on
January 16, 2004. Under the 2004 Stock Repurchase Plan, the Company may purchase
up to 200,000 shares of its common stock from time to time in the open market at
prevailing prices. The 2004 Stock Repurchase Plan was extended by the Company's
Board vote on December 17, 2004 until December 31, 2005. Common stock
repurchased pursuant to the plan will be classified as authorized but un-issued
shares of common stock available for future issuance as determined by the Board
of Directors, from time to time. Northeast Bancorp may discontinue the
repurchase program at any time. From time to time, the Company believes that the
current market price for its common stock is inadequate and does not reflect the
full value of its common stock and at such times purchases its common stock in
the market. For the six months ended December 31, 2004, the Company repurchased
30,000 shares. The number of shares that may yet be purchased under the 2004
Stock Repurchase Plan is 151,200 shares. As of December 31, 2004, the Company
had repurchased $4,248,294 of its common stock and management believes that the
purchases have not had a significant effect on the Company's liquidity and
earnings per share.

Total equity of the Company was $38,309,770 as of December 31, 2004 as
compared to $36,453,020 at June 30, 2004. The increase of $1,856,750, or 5%, was
primarily due to the net income for the six months ended December 31, 2004 and
an increase in value in comprehensive income, less stock repurchases and
dividends paid. Book value per common share was $15.24 as of December 31, 2004
as compared to $14.43 at June 30, 2004. The total average equity to total
average assets ratio of the Company was 6.86% as of December 31, 2004 and 7.51%
at June 30, 2004.

The Company's net cash provided by operating activities was
$2,923,206 during the six months ended December 31, 2004, which was a $2,599,267
decrease compared to the same period in 2003. This decrease was due primarily
from the lower volume of residential real estate loans held for sale. Investing
activities were a net use of cash primarily due to originating loans held in
portfolio and the insurance agency acquisition during the six months ended
December 31, 2004, compared to the same period in 2003. Financing activities
provided net cash from the increases in deposits, repurchase agreements, FHLB
advances net of repayments, and the net increase in junior subordinated notes
compared to the same period in 2003.Overall,
the Company's position of cash and cash equivalents decreased by $3,377,898
during the six months ended December 31, 2004.

The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"),
contains various provisions intended to capitalize the Bank Insurance Fund
("BIF") and also affects a number of regulatory reforms that impact
all insured depository institutions, regardless of the insurance fund in which
they participate. Among other things, FDICIA grants the FRB broader regulatory
authority to take prompt corrective action against insured institutions that do
not meet capital requirements, including placing undercapitalized institutions
into conservatorship or receivership. FDICIA also grants the FRB broader
regulatory authority to take corrective action against insured institutions that
are otherwise operating in an unsafe and unsound manner.

FDICIA defines specific capital categories based on an institution's capital
ratios. Regulations require a minimum Tier 1 core capital equal to 4.0% of
adjusted total assets, Tier 1 risk-based capital of 4.0% and a total risk-based
capital standard of 8.0%. The prompt corrective action regulations define
specific capital categories based on an institution's capital ratios. The
capital categories, in declining order are "well capitalized",
"adequately capitalized", "under capitalized",
"significantly undercapitalized", and "critically
undercapitalized". As of December 31, 2004, the most recent notification
from the FRB categorized the Bank as well capitalized. There are no conditions
or events since that notification that management believes has changed the
institution's category.

At December 31, 2004, the Bank's regulatory capital was in compliance with
regulatory capital requirements as follows:

|                                                      | Actual  | Required
      For Capital Adequacy Purposes | Required To Be "Well Capitalized" Under Prompt
      Corrective Action Provisions
|----------------------------------------------------- | ------- | -------------------------------------------- | ---------------------------------------------------------------------------------
|                                                      | Amount  | Ratio                                        | Amount                                                                           
|(Dollars in Thousands)
      As of December 31, 2004: |         |                                              |                                                                                  
|Tier 1 capital to risk weighted assets                | $44,407 | 10.24%                                       | $17,351                                                                          
|Tier 1 capital to total average assets                | $44,407 | 7.97%                                        | $22,274                                                                          
|Total Capital to risk weighted assets                 | $49,325 | 11.37%                                       | $34,702                                                                          

Management believes that there are adequate funding sources to meet its
liquidity needs for the foreseeable future. Primary among these funding sources
are the repayment of principal and interest on loans, the renewal of time
deposits, and the potential growth in the deposit base. Management does not
believe that the terms and conditions that will be present at the renewal of
these funding sources will significantly impact the Company's operations, due to
its management of the maturities of its assets and liabilities.

Page 23

Off-balance Sheet Arrangements and Aggregate Contractual Obligations

The Company is a party to financial instruments with off-balance sheet risk
in the normal course of business to meet the financing needs of its customers.
These financial instruments include commitments to extend credit, unused lines
of credit and standby letters of credit. These instruments involve, to varying
degrees, elements of credit and interest-rate risk in excess of the amounts
recognized in the condensed consolidated balance sheet. The contract or notional
amounts of these instruments reflect the extent of the Company's involvement in
particular classes of financial instruments.

The Company's exposure to credit loss in the event of nonperformance by the
other party to the financial instrument for commitments to extend credit, unused
lines of credit and standby letters of credit is represented by the contractual
amount of those instruments. To control the credit risk associated with entering
into commitments and issuing letters of credit, the Company uses the same credit
quality, collateral policies, and monitoring controls in making commitments and
letters of credit as it does with its lending activities. The Company evaluates
each customer's creditworthiness on a case-by-case basis. The amount of
collateral obtained, if deemed necessary by the Company upon extension of
credit, is based on management's credit evaluation.

Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Commitments
generally have fixed expiration dates or other termination clauses and may
require payment of a fee. Since many of the commitments are expected to expire
without being drawn upon, the total committed amounts do not necessarily
represent future cash requirements. The Company evaluates each customer's credit
worthiness on a case-by-case basis. The amount of collateral obtained, if it is
deemed necessary by the Company upon extension of credit, is based on
management's credit evaluation of the counter party.

Standby letters of credit are conditional commitments issued by the Company
to guarantee the performance of a customer to a third party. The credit risk
involved in issuing letters of credit is essentially the same as that involved
in extending loans to customers.

Unused lines of credit and commitments to extend credit typically result in
loans with a market interest rate.

A summary of the amounts of the Company's financial instruments, with
off-balance sheet risk at December 31, 2004, follows:

|                                               | Contract Amount  
|---------------------------------------------- | -----------------
|                                               | December 31, 2004
|Commitments to extend credit (1)(3)            | $  20,560,000    
|Commitments related to loans held for sale (2) | $    2,132,000   
|Unused lines of credit (3)(4)                  | $  49,039,000    
|Standby letters of credit (5)                  | $    3,067,000   



|(1) | Represents commitment 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 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 expire in twelve months.                                                                                            

Management believes that the Company has adequate resources to fund all of
its commitments and that substantially all its existing commitments will be
funded with the next twelve months.

Impact of Inflation

The consolidated financial statements and related notes herein have been
presented in terms of historic dollars without considering changes in the
relative purchasing power of money over time due to inflation. Unlike industrial
companies, substantially all of the assets and virtually all of the liabilities
of the Company are monetary in nature. As a result, interest rates have a more
significant impact on the Company's performance than the general level of
inflation. Over short periods of time, interest rates may not necessarily move
in the same direction or in the same magnitude as inflation.

Page 24

Item 3. Quantitative and Qualitative Disclosure about Market Risk

There have been no material changes in the Company's market risk from June
30, 2004. For information regarding the Company's market risk, refer to the
Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2004.

Item 4. Controls and Procedures

The Company maintains controls and procedures designed to ensure that
information required to be disclosed in the reports the Company files or submit
under the Securities Exchange Act of 1934 ("Exchange Act") is
recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the Securities and Exchange Commission, and that such
information is accumulated and communicated to the Company's management,
including our Chief Executive Officer and Chief Financial Officer (the Company's
principal executive officer and principal financial officer, respectively), as
appropriate to allow for timely decisions regarding timely disclosure. In
designing and evaluating disclosure controls and procedures, management
recognizes that any controls and procedures, no mater how well designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives and management is required to apply its judgment in evaluating the
cost/benefit relationship of possible controls and procedures.

Our management, with the participation of the Company's Chief Executive
Officer and Chief Financial Officer, have evaluated the effectiveness of our
disclosure controls and procedures (as defined in Rules 13a - 15(e) and 15d -
15(e) under the Exchange Act) as of the end of the period covered by this Form
10-Q.

Based on this evaluation of our disclosure controls and procedures, our Chief
Executive Officer and Chief Financial Officer have concluded that these
disclosure controls and procedures were effective as of December 31, 2004.

There were no significant changes in our internal controls
over financial reporting (as defined in Rule 13a - 15(f) of the Exchange Act)
that occurred during the first six months of our 2005 fiscal year that has
materially effected, or in other factors that could affect, the Company's
internal controls over financial reporting.

Page 25

Part II - Other Information

|Item 1.        | Legal ProceedingsNone.                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item 2.(c)     | Unregistered Sales of Equity Securities and Use of ProceedsThe 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 Number
Of SharesPurchased (2)                                                                                                                                                                                                                                                                                                                                                                                                                              
|Oct 1 - Oct 31 | 20,000                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Nov 1 - Nov 30 | -                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Dec 1 - Dec 31 | -                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(1)            | Based on trade date, not settlement date.                                                                                                                                                                                                                                                                                                                                                                                                                        
|(2)            | Represents share purchased in open-market transactions
      pursuant to the Company's 2004 Stock Repurchase Plan.                                                                                                                                                                                                                                                                                                                                               
|(3)            | On January 30, 2004, the Company announced that its
      Board of Directors of the Company approved the 2004 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, 2004, unless extended.                                                                                                                 
|Item 3.        | Defaults Upon Senior SecuritiesNone.                                                                                                                                                                                                                                                                                                                                                                                                                             
|Item 4.        | Submission of Matters to a Vote of Security Holders
      SUMMARY OF VOTING AT 11/10/2004 ANNUAL SHAREHOLDERS' MEETINGAt the Annual Meeting of Shareholders held in Auburn, Maine on November
      10, 2004, the following matters were submitted to a vote of, and approved
      by, the Company's shareholders, each such proposal receiving the vote of
      the Company's outstanding common shares, as follows:
      Proposal 1 - Election of Directors:
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|               | John B. Bouchard                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|               | James P. Day                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|               | James D. Delamater                                                                                                                                                                                                                                                                                                                                                                                                                                               
|               | Ronald J. Goguen                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|               | Judith W. Kelly                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|               | Philip Jackson                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|               | Pender J. Lazenby                                                                                                                                                                                                                                                                                                                                                                                                                                                
|               | John Rosmarin                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|               | John Schiavi                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|               | Stephen W. Wight                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|               | Dennis A. Wilson                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Item 5.        | Other InformationNone.                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Item 6.        | Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|               | List of Exhibits:                                                                                                                                                                                                                                                                                                                                                                                                                                                
|               | Exhibits No.                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|               | 1.1                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|               | 4.1                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|               | 4.2                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|               | 4.3                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|               | 10.1                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|               | 10.2                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|               | 10.3                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|               | 11                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|               | 31.1                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|               | 31.2                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|               | 32.1                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|               | 32.2                                                                                                                                                                                                                                                                                                                                                                                                                                                             





Page 26

SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

|Date: February 08, 2005 |     | NORTHEAST BANCORP      
|----------------------- | --- | -----------------------
|                        | By: | /s/ James D. Delamater 
|                        |     | James D. Delamater     
|                        |     | President and CEO      
|                        |     |                        
|                        | By: | /s/ Robert S. Johnson  
|                        |     | Robert S. Johnson      
|                        |     | Chief Financial Officer





Page 27

NORTHEAST BANCORP
Index to Exhibits

|EXHIBIT NUMBER | DESCRIPTION
|-------------- | -----------
|               | 1.1        
|               | 4.1        
|               | 4.2        
|               | 4.3        
|               | 10.1       
|               | 10.2       
|               | 10.3       
|               | 11         
|               | 31.1       
|               | 31.2       
|               | 32.1       
|               | 32.2