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, 2002
|--------------------- | -----------------

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 January 31, 2003, the registrant had outstanding 2,645,868

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,            | June 30,               
|                                                                                | 2002                    | 2002                   
|                                                                                | ________________        | ________________       
|Assets                                                                          |                         |                        
|Cash and due from banks                                                         | $     
      10,076,902 | $     
      14,343,009
|Interest bearing deposits                                                       | 628,478                 | 674,083                
|Federal Home Loan Bank overnight
      deposits                                 | -                       | 3,732,000              
|Available for sale securities                                                   | 20,080,991              | 32,440,386             
|Loans held for sale                                                             | 2,473,472               | 611,210                
|                                                                                |                         |                        
|Loans                                                                           | 391,736,655             | 374,634,119            
|Less allowance for loan losses                                                  | 3,799,000               | 3,496,000              
|                                                                                | ________________        | ________________       
|Net loans                                                                       | 387,937,655             | 371,138,119            
|                                                                                |                         |                        
|Premises and equipment, net                                                     | 4,217,043               | 4,150,197              
|Federal Home Loan Bank stock                                                    | 6,644,500               | 6,644,500              
|Aquired assets - net                                                            | 538,875                 | 586,642                
|Goodwill                                                                        | 407,897                 | 407,897                
|Intangible assets, net of
      accumulated amortization of $1,487,946 at       |                         |                        
|12/31/02 and $1,355,010 at
      6/30/02                                        | 716,782                 | 849,718                
|Bank Owned Life Insurance                                                       | 7,096,710               | -                      
|Other assets                                                                    | 7,032,706               | 6,638,156              
|                                                                                | ________________        | ________________       
|Total Assets                                                                    | $     447,852,011       | $     442,215,917      
|                                                                                | ==============          | ==============         
|                                                                                |                         |                        
|Liabilities and Shareholders'
      Equity                                      |                         |                        
|                                                                                |                         |                        
|Liabilities:                                                                    |                         |                        
|Deposits                                                                        | $     301,816,591       | $     303,197,646      
|Securities Sold Under Repurchase
      Agreements                               | 10,036,056              | 8,871,642              
|Advances from the Federal Home
      Loan Bank                                  | 90,284,622              | 85,956,608             
|Other Liabilities                                                               | 2,445,214               | 2,286,232              
|                                                                                | ________________        | ________________       
|Total Liabilities                                                               | 404,582,483             | 400,312,128            
|                                                                                |                         |                        
|Guaranteed Preferred Beneficial
      Interest in the                           |                         |                        
|Company's Junior Subordinated
      Debentures                                  | 7,172,998               | 7,172,998              
|                                                                                |                         |                        
|Shareholders' Equity:                                                           |                         |                        
|Preferred stock, cumulative,
      $1.00 par value, 1,000,000 shares authorized |                         |                        
|and none issued and outstanding                                                 | -                       | -                      
|Common stock, $1.00 par value,
      15,000,000 shares authorized; 2,786,095    |                         |                        
|shares issued and 2,645,868 and
      2,647,712 shares outstanding              |                         |                        
|at 12/31/02 and 06/30/02,
      respectively                                    | 2,786,095               | 2,786,095              
|Additional paid in capital                                                      | 10,376,842              | 10,374,285             
|Retained earnings                                                               | 24,143,928              | 22,748,760             
|Accumulated other comprehensive
      income                                    | 179,455                 | 178,162                
|                                                                                | ________________        | ________________       
|                                                                                | 37,486,320              | 36,087,302             
|                                                                                | ________________        | ________________       
|Treasury Stock at cost, 140,227
      and 138,383 shares at 12/31/02 and        |                         |                        
|6/30/02, respectively.                                                          | (1,389,790)             | (1,356,511)            
|                                                                                | ________________        | ________________       
|Total Shareholders' Equity                                                      | 36,096,530              | 34,730,791             
|                                                                                | ________________        | ________________       
|Total Liabilities and
      Shareholder' Equity                                 | $     447,852,011       | $     442,215,917      
|                                                                                | ==============          | ==============         



|                                                          |                         |  | Page 4                   
|--------------------------------------------------------- | ----------------------- |  | -------------------------
|                                                          |                         |  |                          
|NORTHEAST BANCORP AND
      SUBSIDIARIES                 
|Consolidated Statements of Income                        
|(Unaudited)                                              
|                                                          |                         |  |                          
|                                                          | Three Months Ended     
|                                                          | December 31,           
|                                                          | 2002                    |  | 2001                     
|                                                          | _______________         |  | _______________          
|Interest and Dividend Income:                             |                         |  |                          
|Interest on FHLB overnight
      deposits                 | $          
      1,786 |  | $         
      65,459  
|Interest on Loans & Loans
      held for sale             | 6,972,980               |  | 7,663,289                
|Interest on available for sale
      securities           | 282,754                 |  | 315,020                  
|Dividends on Federal Home Loan
      Bank stock           | 58,617                  |  | 75,365                   
|Other Interest Income                                     | 1,781                   |  | 2,694                    
|                                                          | _______________         |  | _______________          
|Total Interest and Dividend
      Income                  | 7,317,918               |  | 8,121,827                
|                                                          |                         |  |                          
|Interest Expense:                                         |                         |  |                          
|Deposits                                                  | 2,096,200               |  | 2,874,682                
|Repurchase agreements                                     | 28,141                  |  | 38,218                   
|Trust preferred securities                                | 176,520                 |  | 176,520                  
|Other borrowings                                          | 1,211,778               |  | 1,274,207                
|                                                          | _______________         |  | _______________          
|Total Interest Expense                                    | 3,512,639               |  | 4,363,627                
|                                                          | _______________         |  | _______________          
|                                                          |                         |  |                          
|Net Interest Income                                       | 3,805,279               |  | 3,758,200                
|Provision for loan losses                                 | 465,082                 |  | 210,693                  
|                                                          | _______________         |  | _______________          
|Net interest income after
      Provision for Loan Losses | 3,340,197               |  | 3,547,507                
|                                                          |                         |  |                          
|Non-interest Income:                                      |                         |  |                          
|Service charges                                           | 346,525                 |  | 363,796                  
|Net securities gains                                      | 250,054                 |  | 35,046                   
|Net gain on trading activities                            | 2,447                   |  | -                        
|Net gain on sale of loans                                 | 260,183                 |  | 198,460                  
|Investment/Insurance commissions                          | 410,214                 |  | 373,821                  
|Boli cash surrender value                                 | 103,284                 |  | -                        
|Other                                                     | 73,145                  |  | 49,789                   
|                                                          | _______________         |  | _______________          
|Total Non-interest Income                                 | 1,445,852               |  | 1,020,912                
|                                                          |                         |  |                          
|Non-interest Expenses:                                    |                         |  |                          
|Salaries and employee benefits                            | 1,918,789               |  | 1,667,538                
|Net occupancy expense                                     | 294,070                 |  | 221,330                  
|Equipment expense                                         | 244,183                 |  | 228,136                  
|Intangible assets amortization                            | 66,468                  |  | 43,071                   
|Other                                                     | 922,303                 |  | 846,186                  
|                                                          | _______________         |  | _______________          
|Total Non-interest
      Expenses                         | 3,445,813               |  | 3,006,261                
|                                                          | _______________         |  | _______________          
|                                                          |                         |  |                          
|Income Before Income Taxes                                | 1,340,236               |  | 1,562,158                
|Income tax expense                                        | 428,253                 |  | 543,795                  
|                                                          | _______________         |  | _______________          
|Net Income                                                | $      
      911,983   |  | $     
      1,018,363   
|                                                          | =============           |  | =============            
|Earnings Per Common Share                                 |                         |  |                          
|Basic                                                     | $           
      0.34 |  | $             
      0.40
|Diluted                                                   | $           
      0.34 |  | $             
      0.39
|                                                          |                         |  |                          
|Net interest margin                                       | 3.65%                   |  | 3.59%                    
|Net interest spread                                       | 3.27%                   |  | 3.08%                    
|Return on average assets
      (annualized)               | 0.82%                   |  | 0.94%                    
|Return on average equity
      (annualized)               | 10.10%                  |  | 12.59%                   
|Efficiency ratio                                          | 66%                     |  | 63%                      



|                                                          |                         |  | Page 5                   
|--------------------------------------------------------- | ----------------------- |  | -------------------------
|                                                          |                         |  |                          
|NORTHEAST BANCORP AND
      SUBSIDIARIES                 
|Consolidated Statements of Income                        
|(Unaudited)                                              
|                                                          |                         |  |                          
|                                                          | Six Months Ended       
|                                                          | December 31,           
|                                                          | 2002                    |  | 2001                     
|                                                          | _______________         |  | _______________          
|Interest and Dividend Income:                             |                         |  |                          
|Interest on FHLB overnight
      deposits                 | $         
      32,150 |  | $        
      133,532  
|Interest on loans & Loans
      held for sale             | 13,987,593              |  | 15,662,825               
|Interest on available for sale
      securities           | 612,746                 |  | 636,232                  
|Dividends on Federal Home Loan
      Bank stock           | 121,421                 |  | 169,153                  
|Other Interest Income                                     | 4,588                   |  | 7,095                    
|                                                          | ______________          |  | ______________           
|Total Interest and Dividend
      Income                  | 14,758,498              |  | 16,608,837               
|                                                          |                         |  |                          
|Interest Expense:                                         |                         |  |                          
|Deposits                                                  | 4,375,330               |  | 6,055,731                
|Repurchase agreements                                     | 54,275                  |  | 99,925                   
|Trust preferred securities                                | 353,041                 |  | 353,041                  
|Other borrowings                                          | 2,421,867               |  | 2,717,506                
|                                                          | ______________          |  | ______________           
|Total Interest Expense                                    | 7,204,513               |  | 9,226,203                
|                                                          | ______________          |  | ______________           
|                                                          |                         |  |                          
|Net Interest Income                                       | 7,553,985               |  | 7,382,634                
|Provision for loan losses                                 | 690,558                 |  | 421,016                  
|                                                          | ______________          |  | ______________           
|Net interest income after
      Provision for Loan Losses | 6,863,427               |  | 6,961,618                
|                                                          |                         |  |                          
|Other Non-interest Income:                                |                         |  |                          
|Service charges                                           | 699,778                 |  | 737,636                  
|Net securities gains                                      | 432,903                 |  | 46,083                   
|Net gain on trading activities                            | 2,447                   |  | -                        
|Net gain on sale of loans                                 | 378,734                 |  | 376,464                  
|Investment/Insurance commissions                          | 707,305                 |  | 646,887                  
|Boli cash surrender value                                 | 103,284                 |  | -                        
|Other                                                     | 155,474                 |  | 94,047                   
|                                                          | ______________          |  | ______________           
|Total Other Non-interest Income                           | 2,479,925               |  | 1,901,117                
|                                                          |                         |  |                          
|Other Non-interest Expenses:                              |                         |  |                          
|Salaries and employee benefits                            | 3,704,116               |  | 3,171,843                
|Net occupancy expense                                     | 563,079                 |  | 420,026                  
|Equipment expense                                         | 452,745                 |  | 408,598                  
|Intangible asset amortization                             | 132,936                 |  | 86,142                   
|Other                                                     | 1,768,822               |  | 1,768,069                
|                                                          | ______________          |  | ______________           
|Total Other Non-interest
      Expenses                   | 6,621,698               |  | 5,854,678                
|                                                          | ______________          |  | ______________           
|                                                          |                         |  |                          
|Income Before Income Taxes                                | 2,721,654               |  | 3,008,057                
|Income tax expense                                        | 902,733                 |  | 1,047,332                
|                                                          | ______________          |  | ______________           
|Net Income                                                | $    1,818,921          |  | $     1,960,725          
|                                                          | =============           |  | =============            
|Earnings Per Common Share                                 |                         |  |                          
|Basic                                                     | $           
      0.69 |  | $             
      0.76
|Diluted                                                   | $           
      0.68 |  | $             
      0.75
|                                                          |                         |  |                          
|Net interest margin                                       | 3.61%                   |  | 3.54%                    
|Net interest spread                                       | 3.20%                   |  | 3.00%                    
|Return on average assets
      (annualized)               | 0.82%                   |  | 0.90%                    
|Return on average equity
      (annualized)               | 10.17%                  |  | 12.32%                   
|Efficiency ratio                                          | 66%                     |  | 63%                      



|Page 6                                                                                                                                                                 
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|NORTHEAST BANCORP AND SUBSIDIARIES
      Consolidated Statements of Changes in Shareholders' Equity
      Six Months Ended December 31, 2002 and 2001
      (Unaudited)
|                                                                                                                                                                       
|Balance at June 30, 2001                                                                                                                                               
|Net income for the six months ended 12/31/01                                                                                                                           
|Adjustment of net unrealized loss/gain for Securities available for
      sale                                                                                         
|Total Comprehensive income                                                                                                                                             
|                                                                                                                                                                       
|Treasury stock purchased                                                                                                                                               
|Dividends on common stock at $0.125 per share                                                                                                                          
|Common stock issued in connection with employee benefit and stock
      option plans                                                                                   
|Balance at December 31, 2001                                                                                                                                           
|                                                                                                                                                                       
|Balance at June 30, 2002                                                                                                                                               
|Net income for the six months ended 12/31/02                                                                                                                           
|Adjustment of net unrealized loss/gain for Securities available for
      sale                                                                                         
|Total Comprehensive income                                                                                                                                             
|                                                                                                                                                                       
|Dividends on common stock at $0.16per share                                                                                                                            
|Treasury stock purchased                                                                                                                                               
|Common stock issued in connection with employee benefit and stock
      option plans                                                                                   
|Balance at December 31, 2002                                                                                                                                           
|                                                                                                                                                                       



|                                                                                |                         |  | Page 7                 
|------------------------------------------------------------------------------- | ----------------------- |  | -----------------------
|                                                                                |                         |  |                        
|NORTHEAST BANCORP AND
      SUBSIDIARIES                                       
|Consolidated Statements of Cash
      Flows                                    
|(Unaudited)                                                                    
|                                                                                |                         |  |                        
|                                                                                | Six Months Ended       
|                                                                                | December 31,           
|                                                                                | 2002                    |  | 2001                   
|                                                                                | _______________         |  | _______________        
|Cash provided by operating
      activities                                     | $       
      291,545  |  | $      
      2,366,725
|                                                                                |                         |  |                        
|Cash flows from investing
      activities:                                     |                         |  |                        
|Available for sale securities
      purchased                                   | (10,049,855)            |  | (5,603,855)            
|Available for sale securities
      matured                                     | 2,756,983               |  | 2,999,406              
|Available for sale securities
      sold                                        | 19,948,092              |  | 191,839                
|Net change in loans                                                             | (17,846,991)            |  | 7,454,844              
|Net capital expenditures                                                        | (352,267)               |  | (337,259)              
|Proceeds from sale of acquired
      assets                                     | 658,082                 |  | 488,637                
|Real estate held for investment
      sold                                      | 37,800                  |  | 61,416                 
|Bank ownd life insurance
      purchased                                        | (7,143,999)             |  | -                      
|                                                                                | _______________         |  | _______________        
|Net cash (used) provided by
      investing activities                          | (11,992,155)            |  | 5,255,028              
|                                                                                |                         |  |                        
|Cash flows from financing
      activities:                                     |                         |  |                        
|Net change in deposits                                                          | (1,381,055)             |  | 25,677,253             
|Net change in repurchase
      agreements                                       | 1,164,414               |  | 2,154,962              
|Dividends paid                                                                  | (423,753)               |  | (322,104)              
|Proceeds from stock issuance                                                    | 15,000                  |  | 51,898                 
|Treasury stock buyback                                                          | (45,722)                |  | (16,981)               
|Net increase (decrease) in
      advances from Federal Home Loan Bank of Boston | 4,328,014               |  | (23,574,632)           
|                                                                                | _______________         |  | _______________        
|Net cash provided in financing
      activities                                 | 3,656,898               |  | 3,970,396              
|                                                                                | _______________         |  | _______________        
|                                                                                |                         |  |                        
|Net (decrease) increase in cash
      and cash equivalents                      | (8,043,712)             |  | 11,592,149             
|                                                                                |                         |  |                        
|Cash and cash equivalents,
      beginning of period                            | 18,749,092              |  | 14,188,265             
|                                                                                | _______________         |  | _______________        
|Cash and cash equivalents, end
      of period                                  | $     
      10,705,380 |  | $     
      25,780,414
|                                                                                | =============           |  | =============          
|                                                                                |                         |  |                        
|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, net of tax,                 |                         |  |                        
|on available for sale securities                                                | 1,293                   |  | 208,268                
|Net transfer from loans to
      acquired assets                                | 639,315                 |  | 516,885                
|                                                                                |                         |  |                        
|Supplemental disclosure of cash
      paid during the period for:               |                         |  |                        
|Income taxes paid, net of
      refunds                                         | 848,000                 |  | 860,000                
|Interest paid                                                                   | 7,188,098               |  | 9,279,347              



Page 8

NORTHEAST BANCORP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2002

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,
2002 are not necessarily indicative of the results that may be expected for the
fiscal year ending June 30, 2003. For further information, refer to the audited
consolidated financial statements and footnotes thereto for the fiscal year
ended June 30, 2002 included in the company's Annual Report on Form 10-K.

2.  Guaranteed Preferred Beneficial Interests in the Company's
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 to the public (together
the "Trust Securities"), (ii) using the proceeds of the sale of 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 Trust Securities). Accordingly
the Junior Subordinated Debentures are the sole assets of the NBNCT. The
Preferred Securities accrue and pay distributions quarterly at an annual rate of
9.60% of the stated liquidation amount of $7.00 per Preferred Security. The
Company has fully and unconditionally guaranteed all of the obligations of NBNCT.
The guaranty covers the quarterly distributions and payments on liquidation or
redemption of the Preferred Securities, but only to the extent of funds held by
NBNCT. NBNCT had sold $7,172,998 of its trust preferred securities to the public
and $221,851 of its Common Securities to the Company. The Preferred Securities
are mandatorily redeemable upon the maturity of the Junior Subordinated
Debentures on March 31, 2029 or upon earlier redemption as provided in the
Indenture. The Company has the right to redeem the Junior Subordinated
Debentures, in whole or in part on or after March 31, 2004 at redemption price
specified in the Indenture plus any accrued but unpaid interest to the
redemption date. The Company owns all of the Common Securities of NBNCT, the
only voting security, and as a result it is a subsidiary of the Company.

3.  Loans

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

|                        | December 31, 2002                   | June
      30, 2002                
|----------------------- | ----------------------------------- | -----------------------------------
|Residential real estate | $  157,135,191                      | $  159,566,886                     
|Commercial real estate  | 91,973,242                          | 80,423,303                         
|Construction            | 7,540,054                           | 8,958,052                          
|Commercial              | 55,038,819                          | 48,535,162                         
|Consumer & Other        | 77,271,533  
      _____________    | 74,267,760  
      _____________   
|Total                   | 388,958,839                         | 371,751,163                        
|Net Deferred Costs      | 2,777,816  
      _____________     | 2,882,956  
      _____________    
|Net Loans               | $  391,736,655  
      ============ | $  374,634,119  
      ============

Page 9

4. Allowance for Loan Losses

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

|                                          | Six Months
      Ended
              December 31,
|----------------------------------------- | -------------------------------------------------
|                                          | 2002                                             
|Balance at beginning of year              | $     3,496,000                                  
|Add provision charged to operations       | 690,558                                          
|Recoveries on loans previously charge off | 210,427  
      ______________                   
|                                          | 4,396,985                                        
|Less loans charged off                    | 597,985  
      ______________                   
|Balance at end of period                  | $     3,799,000  
      =============            

5.  Securities

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

|                                                                                                                  | December 31, 2002
      ___________________________ | June 30, 2002
      ___________________________
|----------------------------------------------------------------------------------------------------------------- | --------------------------------------------------- | -----------------------------------------------
|                                                                                                                  | Cost
      _____________                            | Market
      Value
      _____________         
|Debt securities issued by the
      U.S. treasury and other U.S.
      Government corporations and
      agencies | $            
           --                         | $      
                --                     
|Corporate bonds                                                                                                   | 610,275                                             | 640,328                                        
|Mortgage-backed securities                                                                                        | 17,637,105                                          | 18,137,045                                     
|Equity securities                                                                                                 | 1,561,709 
      ____________                       | 1,303,618 
      ___________                   
|                                                                                                                  | $  19,809,089 
      ===========                    | $  20,080,991 
      ==========                

|                                                                                                                                                                 | December 31, 2002
      ___________________________ | June 30, 2002
      ___________________________
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------- | -----------------------------------------------
|                                                                                                                                                                 | Cost
      _____________                            | Market
      Value
      _____________         
|Due in one year or less                                                                                                                                          | $     149,964                                       | $     150,328                                  
|Due after one year through
      five years                                                                                                                      | 460,311                                             | 490,000                                        
|Mortgage-backed securities
      (including securities with interest
      rates ranging from 4.5% to 8.5%
      maturing February 2005 to
      September 2032) | 17,637,105                                          | 18,137,045                                     
|Equity securities                                                                                                                                                | 1,561,709 
      ___________                        | 1,303,618 
      ___________                   
|                                                                                                                                                                 | $ 19,809,089 
      ==========                      | $ 20,080,991 
      ==========                 

Page 10

6.  Deposits.

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

|                        | December 31, 2002
      _________________ | June 30, 2002
      _________________
|----------------------- | ----------------------------------------- | -------------------------------------
|Demand                  | $   28,991,807                            | $   28,252,757                       
|NOW                     | 65,318,875                                | 62,468,856                           
|Money Market            | 18,192,129                                | 15,879,962                           
|Regular Savings         | 22,362,082                                | 23,021,132                           
|Brokered Deposits       | 21,945,109                                | 24,463,179                           
|Certificates of Deposit | 145,006,589   
      _____________        | 149,111,760   
      _____________   
|Total Deposits          | $  301,816,591  
      ============       | $  303,197,646   
      ============ 

7.  Advances from the Federal Home Loan Bank

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

|December 31, 2002
      ________________________________________________________________________
|------------------------------------------------------------------------------------------------
|Principal
      Amounts
      ___________________                                               
|$    20,067,827                                                                                 
|16,616,285                                                                                      
|30,600,510                                                                                      
|1,000,000                                                                                       
|7,000,000                                                                                       
|8,000,000                                                                                       
|7,000,000     
      ________________                                                           
|$    90,284,622     
      ==============                                                       



|June 30, 2002
      _____________________________________________________________________
|-----------------------------------------------------------------------------------------
|Principal
      Amounts
      ___________________                                        
|$       9,478,495                                                                        
|17,478,113                                                                               
|17,000,000                                                                               
|27,000,000                                                                               
|8,000,000                                                                                
|7,000,000     
      __________________                                                  
|$      85,956,608     
      ================                                            

Page 11

8. Stock Option Plans

Northeast Bancorp grants options only to employees of the Company,
"incentive stock options", and grants other options to employees and
non-employee directors, "nonqualified stock options". 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 had 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. A weighted average fair value of $4.21 per option was
determined for the fiscal year ended June 30, 2002. The assumptions for
option-pricing model are detailed in Note 15 of the June 30, 2002 consolidated
financial statements. No options have been granted for the current 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, 2002 and 2001 would have been the amounts shown below.

|                                                                                                                                         | For the Three MonthsEnded December 31 | For the Six MonthsEnded December 31
|---------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------- | -----------------------------------
|                                                                                                                                         | 2002                                  | 2001                               
|Net Income as reported                                                                                                                   | $     911,983                         | $  1,018,363                       
|Deduct: Total stock-based compensation expense determined under fair
      value based method for all awards, net of related tax effects | -  
      ___________                 | (2,737) 
      ___________         
|Pro forma net income                                                                                                                     | $     911,983========                 | $  1,015,626========               
|                                                                                                                                         |                                       |                                    
|Earnings per share                                                                                                                       |                                       |                                    
|Basic - as reported                                                                                                                      | $         0.34                        | $         0.40                     
|Basic - pro forma                                                                                                                        | $         0.34                        | $         0.39                     
|                                                                                                                                         |                                       |                                    
|Diluted - as reported                                                                                                                    | $         0.34                        | $         0.39                     
|Diluted - pro forma                                                                                                                      | $         0.34                        | $         0.39                     



Page 12

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

Description of Operations

Northeast Bancorp (the "Company") is a Maine corporation and a
registered unitary savings and loan holding company with the Office of Thrift
Supervision ("OTS") its primary regulator. We conduct business from
our headquarters in Auburn, Maine and, as of December 31, 2002, from 14 banking
offices all located in Western and South-central Maine. At December 31, 2002, we
had consolidated assets of $448 million and consolidated shareholders' equity of
$36.1 million.

Northeast Bancorp's principal asset is its wholly-owned banking subsidiary,
Northeast Bank, FSB (the "Bank"), a federally chartered savings and
loan association. Accordingly, the Company's results of operations are primarily
dependent on the results of operations of the Bank. The Bank has branches
located in Auburn, Augusta, Bethel, Brunswick, Buckfield, Harrison, Lewiston,
Lisbon Falls, Mechanic Falls, Richmond, and South Paris, Maine. The Bank also
has a commercial banking center located in Portland, Maine. The Bank has a
wholly owned subsidiary Northeast Financial Services, Inc., which maintains its
principal offices on US Route 1 in Falmouth, Maine. From this location, loan
applications are accepted and investment, insurance and financial planning
products and services are offered. Kendall Insurance, an insurance agency which
is a division of Northeast Financial Services, Inc., offers property and
casualty insurance products from a facility in Bethel, Maine.

The Bank's strategy is to continue to expand its commercial loan business,
increase its line of financial products and services, and expand its market
area. This strategy is designed to increase core earnings in the long term by
providing stronger interest margins, additional non-interest income, and
increased loan volume. Substantially all of the Bank's current income and
services are derived from banking products and services in Maine.

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, 2002 and 2001 and the financial condition at
December 31, 2002 and June 30, 2002. 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,
2002 for discussion of the critical accounting policies of the Company.

Certain statements contained herein are not based on historical facts and are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, such as statements relating to
financial condition and future prospects, loan loss reserve adequacy, simulation
of changes in interest rates, prospective results of operations, capital
spending and financing sources, and revenue sources. These statements relate to
expectations concerning matters that are not historical facts. 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". Such forward-looking statements reflect the current view of
management and are based on information currently available to them, and upon
current expectations, estimates, and projections regarding the Company and its
industry, management's belief with respect there to, and certain assumptions
made by management. These forward-looking statements are not guarantees of
future performance and are subject to risks, uncertainties, and other factors.
Accordingly, actual results could differ materially from those set forth in
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. A more
detailed description of potential risks, uncertainties, and other factors which
could cause the Company's financial performance or results of operations to
differ materially from current expectations or such forward-looking statements
is set forth in Part 1, Item 1 of the Company's Form 10-K for the fiscal year
ended June 30, 2002 under the heading "Forward Looking Statements" and
is incorporated herein by reference.

Results of Operations

The Company reported net income of $911,983 or $0.34 per diluted share for
the three months ended December 31, 2002 compared with $1,018,363, or $0.39 per
diluted share for the three months ended December 31, 2001, a decrease of
$106,380 or 10.4%. Net interest income improved $47,079, or 1%, primarily from
improved net interest margin. Non-interest income improved $424,940, or 42%,
from increased investment and insurance commissions, increased cash surrender
value of bank owned life insurance, increased in gain on the sale of residential
loans, and increased net securities gains. The provision for loan losses
increased $254,389, or 121%, compared to the three months ended December 31,
2001, to reflect the increasing mix of commercial real estate and commercial
loans in the Bank's loan portfolio and replenish the allowance for loan losses
from high net charge offs. Non-interest expense increased $439,552, or 14.6%.
The higher non-interest expense resulted from adding a new commercial loan
brokerage division and expanding the insurance division through the acquisition
of Kendall Insurance by Northeast Financial Services, adding a new call center
to Northeast Bank and opening a new commercial banking center in Portland. Also,
staff was added to support record volumes of residential real estate and
commercial loans. Full-time equivalent staff increased by 22 as of the quarter
ended December 31, 2002 compared to the same period last year.

Page 13

Net interest income is the difference between interest income on earning
assets such as loans and securities, and interest expense incurred on
liabilities such as deposits, securities sold under repurchase agreements, and
borrowings. This continues to be our largest revenue source. Net interest income
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.

Net interest income for the three months ended December 31, 2002 increased
$47,079 compared to the same period in 2001. Net interest margin increased to
3.65% from 3.59% for the respective periods. Average earning assets increased
$1,519,000 for the three months ended December 31, 2002 compared to December 31,
2001. The increase in net interest income was due to the decreasing rates
incurred on interest-bearing liabilities, slightly lower volume of funds
borrowed, and an increase in average investments. Interest rate declines on
interest-earning assets partially offset the overall lower cost of deposits and
borrowings. The rate decreases reflect the interest rate cuts by the Open Market
Committee of the Federal Reserve during 2001 and 2002. Average loans as a
percentage of average earning assets was 92% and 91% for the quarters ended
December 31, 2002 and 2001, respectively. Average loans increased $5,557,000, or
1.5%, compared to December 31, 2001 due to continuing commercial real estate,
commercial and consumer loan originations.

The provision for loan losses for the three months ended December 31, 2002
was $465,082, an increase of $254,389 from $210,693 for the three months ended
December 31, 2001. Net charge-offs amounted to $316,082 for the three months
ended December 31, 2002 compared to $241,193 for the same period in 2001. The
Bank experienced continued loan growth in the commercial real estate and
commercial loans during the quarter ended December 31, 2002. Increases in the
provision for loan losses replenish the allowance for loan losses for the high
level of net charge offs and was also needed to address a shift in loan mix to
loans with a higher risk profile, the economic slowdown and an uncertain
economic climate. The allowance as a percentage of outstanding loans increased
to 0.97% compared to 0.94% at June 30, 2002.

Total non-interest income was $1,445,852 for the three months ended December
31, 2002, an increase of $424,940 from the three months ended December 31, 2001.
This increase was due to $217,455 higher net securities and trading gains,
$61,723 higher gains on sale of residential real estate loans, $36,393 higher
investment and insurance commissions, $103,284 increase in the cash surrender
value of bank owned life insurance (BOLI), and $23,356 other non-interest income
partially offset by $6,861 lower other service charges to customers and $10,410
lower loan and loan service fees. See Financial Condition for further discussion
of BOLI. The higher net securities gains were realized from the sale of
mortgage-backed securities. Kendall Insurance division accounted for the higher
investment and insurance commissions for the three months ended December 31,
2002. Higher trust revenue was realized from increased volume of assets and
gains from the sale of real estate held for development accounts for the higher
other income. Lower other service charges to customers were primarily from the
loss of off-balance sheet sweep account fees on non-bank products caused by the
introduction of a new on-balance sheet sweep account product. Lower loan
servicing fees were due to increased amortization of mortgage servicing rights
caused by residential loan prepayments.

Total non-interest expense for the three months ended December 31, 2002 was
$3,445,813 an increase of $439,552 from $3,006,261 for the three months ended
December 31, 2001. This increase was primarily due to increased salaries and
employee benefits of $251,251. The reason for the increase in this expense was
due to the addition of 22 full-time equivalent employees comprised of new staff
for the commercial loan brokerage and Kendall Insurance divisions added in early
calendar 2002, hiring staff for a new call center and to support increased
commercial and residential real estate loan volume. Higher investment division
commissions and group medical expense also contributed to the increased salary
and employee benefit expense. Net occupancy expense increased $72,740 for the
quarter ended December 31, 2002 as compared to the prior year. This increase was
attributable to additional leased space for new divisions and staff, and repairs
and maintenance expenses to office and branch facilities owned by the Bank.
Equipment expense increased $16,047 for the three months ended December 31, 2002
as compared to the prior year. This increase was due to higher software and
computer equipment maintenance contract expenses and moving and storage
expenses. Intangible asset amortization increased $23,397 for the three months
ended December 31, 2002 as compared to the prior year from the amortization of
non-compete and customer list intangibles acquired in the purchase of Kendall
Insurance. Other expense increased $76,117 for the three months ended December
31, 2002 as compared to the prior year due to higher electronic banking and
outsourced cash management expenses, and increased accrued expenses for acquired
asset liquidation expense and potential deposit related loss.

The efficiency ratio was 66% and 63% for the three months ended December 31,
2002 and 2001, respectively. The increase in the efficiency ration was primarily
from growth in total non-interest expenses.

The Company's income tax expense decreased by $115,542 for the three months
ended December 31, 2002 when compared to the three months ended December 31,
2001. The decrease in income tax expense was due to lower earnings before tax
and the exclusion of the increase in BOLI cash surrender value from taxable
income.

Page 14

Net income for the six months ended December 31, 2002 was $1,818,921, or
$0.68 per diluted share, a decrease of $141,804 from the $1,960,725, or $0.75
per diluted share for the six months ended December 31, 2001. Net interest
margin increased 7 basis points contributing to the $171,351, or 2%, increase in
net interest income for the six months ended December 31, 2002. The changes in
net interest income are presented in the schedule below.

|                                                                                                                                                                | Difference Due to                 |                                   
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------- | ----------------------------------
|                                                                                                                                                                | Volume                            | Rate                              
|Investments                                                                                                                                                     | $        54,118                   | $      (125,336)                  
|Loans, net                                                                                                                                                      | 226,225                           | (1,901,457)                       
|FHLB & Other Deposits                                                                                                                                           | (59,948)
      _____________      | (43,941)
      _____________      
|Total Interest-earnings Assets                                                                                                                                  | 220,395                           | (2,070,734)                       
|                                                                                                                                                                |                                   |                                   
|Deposits                                                                                                                                                        | (216,615)                         | (1,463,786)                       
|Repurchases Agreements                                                                                                                                          | (2,079)                           | (43,571)                          
|Borrowings                                                                                                                                                      | (233,887)
      _____________     | (61,752)
      _____________      
|Total Interest-bearing Liabilities                                                                                                                              | (452,581)
      _____________     | (1,569,109)
      _____________   
|Net Interest Income                                                                                                                                             | $     672,976 
      ============ | $     (501,625)
      ============
|Rate/Volume amounts spread proportionately between volume and rate.
      Borrowings in the table include trust preferred securities and FHLB
      borrowings.

The Company's business primarily consists of the savings and loan 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 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 shifted to 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 will generally experience an improvement in its
net interest margins during a period of increasing interest rates.

As of December 31, 2002 and 2001, 47% and 39%, respectively, of the Bank's
loan portfolio was comprised of floating 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 expansion, the impact on 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.

The provision for loan losses for the six months ended December 31, 2002
increased $269,542, or 64%, over the same period last year due to higher mix of
commercial real estate and commercial loans outstanding, an increase of 22% from
the same period last year.

Non-interest income was $2,479,925 for the six months ended December 31, 2002
compared to $1,901,117 for the six months ended December 31, 2001. The
non-interest income increase of $578,808, or 30%, was primarily due to increased
net securities gains of $386,820, increased investment and insurance commissions
of $60,418, increased BOLI cash surrender value of $103,284 and increased other
non-interest income of $61,427 from higher trust fees and real estate
development income.

Non-interest expense was $6,621,698 for the six months ended December 31,
2002 compared to $5,854,678 for the six months ended December 31, 2001. The
increase of $767,020, or 13%, was due primarily to increased salary and employee
benefits. For the six months ended December 31, 2002 salary and employee
benefits increased $532,273, or 17%, compared to the same period last year. This
increase includes the salary and benefits for 22 staff additions in the
commercial loan originator division, insurance divisions and customer call
center as well as increased salaries on investment division commissions received
as compared to the same period last year. Net occupancy expense increased
$143,053, or 34% compared to the six months ended December 31, 2001 primarily
from new leased space for the above staff additions, the new commercial banking
center opened in Portland and building repair and maintenance expense. Equipment
expense increased $44,147, or 11%, from increased software maintenance contract
expense, equipment expense, and moving and storage expense. Intangible
amortization increased $46,794, or 54%, from the additional amortization of the
non-compete agreement and customer list intangibles from the purchase of Kendall
Insurance in 2002. Other non-interest expense increased slightly due to the
decreased other than temporary declines in fair value of securities write-downs
almost offsetting increased expenses for professional fees, REO expense,
business property insurance premiums, outsourced transaction charges, supplies
and telephone expenses.

Page 15

Financial Condition

Our consolidated assets amounted to $447,852,011 and $442,215,917 as of
December 31, 2002 and June 30, 2002, respectively, an increase of $5,636,094, or
1%. This increase in assets was due primarily to an increase in loans funded
from: (a) liquidation of the overnight deposit, (b) liquidation of available for
sale securities (government agencies and mortgage backed securities), and (c)
short-term FHLB advances. Part of the liquidation of available for sale
securities was used to fund the purchase of approximately $7 million in
bank-owned life insurance ("BOLI") on the lives of certain employees
of the Bank and its wholly owned subsidiary Northeast Financial Services, Inc.
on September 30, 2002. Total average assets were $441,176,000 for the six months
ended December 31, 2002. Total stockholders' equity was $36,096,529 and
$34,730,791 at December 31, 2002 and June 30, 2002, respectively.

The investment portfolio was $20,080,991 as of December 31, 2002, a decrease
of $12,359,395, or 38%, from $32,440,386 as of June 30, 2002. The decrease was
due to the liquidation of government agency securities primarily to fund the
growth in loans during the six months ended December 31, 2002, and the BOLI
purchase on September 30, 2002. The investment portfolio as of December 31, 2002
consists of mortgage-backed securities, corporate bonds, 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 $21,839,000 for the
six months ended December 31, 2002 as compared to $19,772,000 for the six months
ended December 31, 2001, an increase of $2,067,000 or 10%.

The Company's investment portfolio is classified as available for sale at
December 31, 2002 and June 30, 2002, 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, 2002 was $19,809,089 and $20,080,991, respectively. The difference between
the carrying value and the cost of the securities of $271,902 was primarily
attributable to the increase in the market value of mortgage-backed securities
due to decreasing interest rates. The net unrealized gain on mortgage-backed
securities and corporate bonds was $529,993 and the net unrealized loss on
equity securities was $258,091 at December 31, 2002. Substantially all of the
mortgage-backed securities are high-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. Based on
management's assessment of the securities portfolio, there have been other than
temporary declines in values of individual equity securities in the amount of
$44,137 for the six months ended December 31, 2002. A substantial portion of
this write-down was attributable to four securities for which the recent
financial performance had deteriorated. Such securities have been written down
and the write-downs are included in other expenses in the statement of income
for the six months ended December 31, 2002. Management also plans to hold the
equity securities for the foreseeable future because we believe that the decline
in equity values is due to overall downturn in market conditions, but the
underlying companies are viable and well managed.

Total loans of $391,736,655 as of December 31, 2002 increased $17,102,536 or
5%, from $374,634,119 as of June 30, 2002. Compared to June 30, 2002, commercial
real estate, commercial loan, and consumer loan portfolios increased and
residential real estate and construction loans declined. Aggregate commercial
real estate and commercial loans increased $18,053,596, or 14%, compared to June
30, 2002. The increase in commercial loans was due to new opportunities with
small businesses within our market areas. Compared to the same period, consumer
loans increased $3,003,773, or 4%. The increase in consumer loans was due to
indirect recreational vehicle, indirect auto loans, and personal loans. These
loan portfolios contain elements of credit and interest rate risk. 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, decreased by $2,431,695, or 2% compared to June 30,
2002. The continuing high prepayments experienced on purchased and portfolio
residential real estate loans is attributable to high levels of refinancing in a
low interest rate environment and more than offset the increase in commercial 1
to 4 family loans. The total loan portfolio averaged $387,608,853 for the
quarter ended December 31, 2002, an increase of $14,139,499, or 4%, from the
quarter ended December 31, 2001

The Bank primarily lends within its local market areas, which management
believes helps them to better evaluate credit risk. The Bank's loan portfolio
mix as of December 31, 2002 has changed with increases in commercial real estate
and commercial loans when compared to June 30, 2002. 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. In an effort to increase loan volume, the Bank's interest rates
for its loan products have been reduced to compete in the various markets.

Page 16

Residential real estate loans consisting of owner-occupied residential loans
as a percentage of total loans were 40%, 43% and 45% as

Commercial real estate loans as a percentage of total loans were 24%, 22% and
20% as of December 31, 2002, June 30, 2002 and December 31, 2001, 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 93%, 93% and
91% 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 $85,858,949 for the
three months ended December 31, 2002 increased $14,539,102, or 20%, from the
same period in 2001. The increase in commercial real estate loans was due to
market share increases in its existing business markets.

Construction loans as a percentage of total loans were 2% as of December 31,
2002, June 30, 2002 and December 31, 2001, respectively. Risk is controlled by
limiting disbursements to the percentage of construction completed. The
construction progress is verified by an independent consultant or appraiser.
Construction loans have maturity dates less than one year. The variable rate
products as a percentage of total construction loans was 66%, 74%, and 56% for
the same periods respectively.

Commercial loans as a percentage of total loans were 14%, 13%, and 13% as of
December 31, 2002, June 30, 2002 and December 31, 2001, respectively. The
variable rate products as a percentage of total commercial loans were 54%, 53%,
and 54% for the same periods respectively. The repayment ability of commercial
loans 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 $54,696,124 for the three months
ended December 31, 2002 increased $7,706,650, or 16%, from the same period in
2001.

Consumer and other loans as a percentage of total loans were 20% for the
periods ended December 31, 2002, June 30, 2002, and December 31, 2001. Indirect
recreational vehicle and mobile home loans comprise approximately

The Bank's allowance for loan losses was $3,799,000 as of December 31, 2002
as compared to $3,496,000 as of June 30, 2002, representing 0.97% and 0.94% of
total loans, respectively.



|Description             | December 31, 2002                   | June 30,2002                       
|----------------------- | ----------------------------------- | -----------------------------------
|Residential Real Estate | $     260,000                       | $     486,000                      
|Commercial Real Estate  | 363,000                             | 330,000                            
|Commercial Loans        | 757,000                             | 183,000                            
|Consumer and Other      | 142,000    
      ____________      | 172,000    
      ____________     
|Total non-performing    | $   1,522,000    
      =========== | $   1,171,000    
      ===========

Page 17

Management does not believe that the increase in non-performing commercial
loans as of December 31, 2002 was indicative of a trend because a significant
portion was brought current or paid down subsequent to quarter end. At December
31, 2002, the Bank had $363,587 in loans classified substandard that management
believes could potentially become non-performing due to delinquencies or
marginal cash flows. These substandard loans increased by $263,587

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

|12-31-02 | 09-30-02 | 06-30-02 | 03-31-02
|-------- | -------- | -------- | --------
|1.41%    | 0.92%    | 1.03%    | 0.88%   

At December 31, 2002, loans classified as non-performing included
approximately $214,000 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 1.37% as of December 31, 2002.

The level of the allowance for loan losses, as a percentage of total loans,
increased to 0.97% at December 31, 2002 compared to 0.94% at June 30, 2002.
Management has increased the provision to maintain an allowance at a level that
management believes is reasonable for the overall risk inherent in the loan
portfolio. The factors considered include the increasing mix of commercial and
consumer loans, the slight increase in non-performing loans, the decrease in net
charge offs compared to the six months ended December 31, 2001, internal risk
ratings and credit concentrations. The increase in delinquencies was seasonal
and consistent with prior year trends.

Provisions for loan losses are based on management's ongoing evaluation of
the adequacy of the allowance for loan losses. This evaluation involves a high
degree of management judgment. The methods employed to evaluate the allowance
for loan losses are quantitative in nature and consider such factors as the loan
mix, the level of non-performing loans, delinquency trends, past charge-off
history, loan reviews and classifications, collateral, and the current economic
climate. For the six months ended December 31, 2002, 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.

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. Such 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 examination by the Office of Thrift Supervision was in June 2002. At the
time of the exam the regulators proposed no adjustments to the allowance for
loan losses.

At December 31, 2002, the Company had acquired assets of $538,875 a decrease
of $47,767 compared to June 30, 2002. The decrease is net of additions of
$639,315 dispositions of $658,082 and provision to the allowance for losses of
$29,000. Management periodically receives independent appraisals to assist in
its valuation of acquired assets. As a result of its review of the independent
appraisals and the acquired assets portfolio, the Company believes the allowance
for losses of $15,505 is adequate to state the portfolio at lower of cost, or
fair value less estimated selling expenses.

Bank owned life insurance (BOLI) was purchased on September 30, 2002. BOLI
was invested in the general account of two quality insurance companies. Standard
and Poor's rated these companies AA+ or better at September 30, 2002. 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 offset all or 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 17.8% of capital and reserves
at December 31, 2002.

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 deposit 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 $301,816,591 as of December 31, 2002 decreased $1,381,055,
or less than 1%, from $303,197,646 as of June 30, 2002. Demand deposits and NOW
accounts increased $739,050 and $2,850,019, respectively, for the six months
ended December 31, 2002. Money market accounts increased $2,312,167 for the six
months ended December 31, 2002. Regular savings accounts decreased $659,050.
Brokered and regular certificates of deposits decreased during the same period
by $6,623,241. The increase in money market account balances reflect new
accounts opened for the Maximum Return Sweep product sold to commercial
customers. The decrease in brokered and regular certificates of deposit reflects
continuing competitive pressure from other financial institutions and customers
seeking the best rates offered. Management's strategy is to continue offering
certificate of deposit rates in the middle of the market, thus reducing the
related interest expense as certificates of deposits renew. For the six months
ended December 31, 2002, total average deposits increased $12,408,925, or 4%, to
$299,607,948 from $287,199,023 for the six months ended December 31, 2001.

Page 18

Total average deposits of $300,160,183 for the three months ended December
31, 2002 increased $7,378,847 from the average for the three months ended
December 31, 2001. The increase in total average deposits compared to December
31, 2001 is net of a $26,994,862, or 25%, increase in demand deposit, NOW, money
market and regular savings accounts partially offset by a $12,255,091, or 37%,
decrease in brokered certificates of deposit and an $7,360,924 or 11%, decrease
in regular certificates of deposit. The increase in transaction accounts
resulted from the bank's promotion of Express Gold, a NOW account with tiered
interest rates, to attract core deposits, accounting for $11,649,520 of the
transaction account increase. This promotion also encouraged the shift from
certificates of deposit to transaction accounts. The Express Gold tiered rates
are at market levels. Money market account average balances increased
transaction accounts by $10,297,041 due to the introduction of the Maximum
Return Sweep to commercial customers in the spring of 2002. The decrease in bank
certificates of deposit is attributable to a declining interest rate environment
that significantly lowered certificate of deposit rates offered to customers and
competitive pressure. Cross selling strategies are employed by the Bank to
enhance deposit growth. 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.

At December 31, 2002,

Securities sold under repurchase agreements were $10,036,056 as of December
31, 2002, an increase of $1,164,414, or 13%, from $8,871,642 as of June 30,
2002. The increase was attributable to new accounts opened during the quarter.
Average securities sold under repurchase agreements were $11,322,424 for the
three months ended December 31, 2002, a decrease of $484,199, or 4%, compared to
the average for the three months ended December 31, 2001. Repurchase agreements
enhance the Bank's ability to obtain additional municipal and commercial
deposits, improving its overall liquidity position in a cost-effective manner.

Advances from the Federal Home Loan Bank (FHLB) were $90,284,622 as of
December 31, 2002, an increase of $4,328,014, or 5%, from $85,956,608 as of June
30, 2002. The increase in FHLB advances funded increases in loans. The Bank's
current advance availability, our unused borrowing capacity subject to the
satisfaction of certain conditions, is approximately $6,201,378 over and above
the December 31, 2002 advances. Residential and certain commercial real estate
loans, certain investment securities, and certain FHLB deposits free of liens,
pledges and encumbrances are required to be pledged to secure FHLB advances. The
Bank pledged additional commercial real estate loans subsequent to December 31,
2002 to increase its borrowing capacity. Management believes that the Company's
available liquidity resources are sufficient to support the Company's needs. In
addition to the traditional retail products, the Bank has the ability to access
funds from maturing securities and loans, the sale of securities and loans,
borrowing capacity at the Federal Home Loan Bank, repurchase agreements and
brokered deposits. Average advances from the FHLB were $86,063,330 for the three
months ended December 31, 2002, a decrease of $1,706,785, or 2%, compared to
$87,770,115 average for the same period last year.

In December 1999, the Board of Directors of the Company approved a plan to
repurchase up to $2,000,000 of its common stock and in May 2001, the Board of
Directors authorized the repurchase of an additional $2,000,000 of common stock.
Under the common stock repurchase plan, the Company may purchase shares of its
common stock from time to time in the open market at prevailing prices.
Repurchased shares will be held in treasury and may be used in connection with
employee benefits and for other general corporate purposes. The Company does not
believe that the current market price for its common stock adequately reflects
full value and believes that the purchase of its common stock from time to time
in the market is a good investment and use of its funds. For the six months
ended December 31, 2002, 2,385 shares were repurchased. As of December 31, 2002,
the Company had repurchased $1,389,790 of its common stock and management
believes that the purchase will not have a significant effect on the Company's
liquidity and earnings per share.

Total equity of the Company was $36,096,529 as of December 31, 2002 as
compared to $34,730,791 at June 30, 2002. The increase of $1,365,738, or 4%, was
primarily from net income increasing retained earnings less dividends paid. Book
value per common share was $13.64 as of December 31, 2002 as compared to $13.12
at June 30, 2002. The total equity to total assets ratio of the Company was
8.06% as of December 31, 2002 and 7.85% at June 30, 2002.

The Company's net cash provided by operating activities was $291,545 during
the six months ended December 31, 2002, which was a $2,075,180 decrease compared
to the same period in 2001. This decrease was primarily due to the origination
of loans held for sale. Investing activities were a net use of cash due to new
loans and purchase of bank owned life insurance exceeding the cash generated by
the maturity and net available for sale securities sold during the six months
ended December 31, 2002 compared to the same period in 2001. Financing
activities provided net cash from the increase in advances from the Federal Home
Loan Bank of Boston compared to the same period in 2001. Overall, the Company's
cash position decreased by $8,043,712 during the six months ended December 31,
2002.

Page 19

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 OTS 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 OTS 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, 2002, the most recent notification
from the OTS 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, 2002, 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, 2002: |              |                                              |                                                                                  
|Tier 1 (Core) capital to risk weighted assets         | $     39,793 | 11.42%                                       | $     13,940                                                                     
|Tier 1 (Core) capital to total assets                 | $     39,793 | 8.93%                                        | $     17,825                                                                     
|Total Capital to risk weighted assets                 | $     42,186 | 12.11%                                       | $     27,879                                                                     

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 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.

Commitments outstanding as of December 31, 2002 for residential real estate,
commercial real estate, and commercial loans totaled $21,456,000. Unused lines
of credit from commercial, construction, and home equity lines of credit totaled
$32,893,000. The loan commitments and unused lines of credit for commercial and
construction loans expire or are subject to renewal in twelve months or less.

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.

Item 3. Quantitative and Qualitative Disclosure about Market Risk

There have been no material changes in the Company's market risk from June
30, 2002. For information regarding the Company's market risk, refer to the
Company's Annual Report on Form 10-K dated as of June 30, 2002.

Item 4. Controls and Procedures

Under the supervision and with the participation of the Company's President
and Chief Executive Officer, and Chief Financial Officer (its principal
executive officer and principal financial officer respectively), management has
evaluated the effectiveness of the design and operation of the Company's
disclosure controls and procedures within 90 days of the filing date of this
quarterly report. Based on that evaluation, the President and Chief Executive
Officer, and Chief Financial Officer have concluded that these disclosure
controls and procedures (as such term is defined in Rule 13a-14(c) promulgated
under the Securities Exchange Act of 1934) are effective to ensure the
disclosure of material information related to the Company, including its
consolidated subsidiaries, that is required to be disclosed in reports the
Company files and submits under the Securities Exchange Act of 1934. There were
no significant changes in our internal controls or in other factors known to us
that could significantly affect these internal controls subsequent to the date
of the evaluation.



Page 20

Part II - Other Information

|Item 1.                  | Legal ProceedingsNone.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item 2.                  | Changes in SecuritiesNone.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Item 3.                  | Defaults Upon Senior SecuritiesNone.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Item 4.                  | Submission of Matters to a Vote of Security Holders
      SUMMARY OF VOTING AT 11/12/2002 ANNUAL SHAREHOLDERS' MEETINGAt the Annual Meeting of Shareholders held in Auburn,
      Maine on November 12, 2002, 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 W. Trinward, D.M.D. | 2,408,418                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|John B. Bouchard         | 2,406,218                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|James D. Delamater       | 2,408,718                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Ronald J. Goguen         | 2,405,418                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Judith W. Kelly          | 2,408,118                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Philip Jackson           | 2,406,218                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Roland C. Kendall        | 2,408,485                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|John Rosmarin            | 2,408,718                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|John Schiavi             | 2,408,718                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Stephen W. Wight         | 2,403,460                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Dennis A. Wilson         | 2,408,485                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                         | Proposal 2 - Ratification of Appointment of Auditors. Proposal to
      ratify the appointment of Baker Newman & Noyes, Limited Liability
      Company, as the Company's auditors for the 2003 fiscal year.                                                                                                                                                                                                                                                                                                                                                                        
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Item 5.                  | Other InformationNone.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Item 6.                  | Exhibits and Reports on Form 8- K                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(a)                      | List of Exhibits:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                         | Exhibits No.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                         | 11                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(b)                      | Reports on Form 8- K                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                         | On November 14, 2002, the Company filed a Current Report on Form 8-K
      under Item 9 to disclose that the certificates required by 18 U.S.C. 1350,
      as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, were
      submitted to the Securities and Exchange Commission in connection and
      simultaneously with the filing of the Company's Form 10-Q for the quarter
      ended September 30, 2002. The certificate of the Chief Executive Officer
      and Chief financial Officer was filed therewith as Exhibit 99.1 and 99.2
      respectively.







Page 21

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 13, 2003 | NORTHEAST BANCORP                                                                                                                                      
|----------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------
|                        | By:        James D. Delamater
              _______________________
                 James D.
      Delamater
                 President
      and CEO 
|                        | By:       Robert S. Johnson
             ________________________
                 Robert
      S. Johnson
               Chief Financial
      Officer







Page 22

CERTIFICATIONS



I, James D. Delamater, certify that:

1. I have reviewed this quarterly report on Form 10-Q of
Northeast Bancorp;

2. Based on my knowledge, this quarterly report does not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by
this quarterly report;

3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this quarterly
report;

4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:

a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons performing
the equivalent function):

a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves
management or other employees who have a significant role in the registrant's
internal controls; and

6. The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.

Dated: February 13, 2003

By:
      /s/ James D. DelamaterJames D. DelamaterPresident and CEO








Page 23

CERTIFICATIONS



I, Robert S. Johnson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of
Northeast Bancorp;

2. Based on my knowledge, this quarterly report does not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by
this quarterly report;

3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this quarterly
report;

4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:

a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons performing
the equivalent function):

a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves
management or other employees who have a significant role in the registrant's
internal controls; and

6. The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.

Date: February 13, 2003

|By: | /s/ Robert S. Johnson        
|--- | -----------------------------
|    | Robert S. Johnson            
|    | Chief Financial Officer      
|    | (Principal Financial Officer)







Page 24

NORTHEAST BANCORP
Index to Exhibits

|EXHIBIT NUMBER | DESCRIPTION
|-------------- | -----------
|               | 11