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      September 30, 1996
                 
                                      or

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

For the transition period from _______________  to  _______________

Commission File Number         0 - 16123
                        ______________________ 

                                 Northeast Bancorp
_______________________________________________________________________________
                 (Exact name of registrant as specified in its charter)
  
                Maine                                   01 - 0425066
________________________________________   ____________________________________
                                                
    (State or other jurisdiction of        (I.R.S. Employer Identification No.)
     incorporation or organization)          
                                                                            
    158 Court Street, Auburn, Maine                        04210
________________________________________   ____________________________________
(Address of principal executive offices)                (Zip Code)

                                (207) 777 - 5950
_______________________________________________________________________________
               Registrant's telephone number, including area code

                                 Bethel Bancorp
_______________________________________________________________________________
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 periods that the 
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.     Yes  __X__          No_____     

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE 
PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and 
reports required to be filed by Section 12, 13 or 15 (d) of the Securities 
Exchange Act of 1934 subsequent to the distribution of securities under a plan 
confirmed by a court.

                                 Not Applicable

                      APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's classes of 
common stock, as of the latest practicable date.  

Shares outstanding as of November 8, 1996: 1,231,547 of common stock, $1.00 par
value per share.


                       NORTHEAST BANCORP AND SUBSIDIARY
                              Table of Contents
                                   
Part I.  Financial Information

         Item 1. Financial Statements (unaudited)

                 Consolidated Balance Sheets
                  September 30, 1996 and June 30, 1996      

                 Consolidated Statements of Income
                  Three Months ended September 30, 1996 and 1995               
                            
                 Consolidated Statements of Changes in Shareholders' Equity
                  Three Months ended September 30, 1996 and 1995             

                 Consolidated Statements of Cash Flows
                  Three Months ended September 30, 1996 and 1995             
                     
                 Notes to Financial Statements                               

         Item 2. Management's Discussion and Analysis of Financial Condition
                  and Results of Operation                                   
                                
Part II. Other Information
                      
         Items 1 - 6.                                                          

         Signature Page                                                     

         Index to Exhibits                                                   

NORTHEAST BANCORP AND SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)

<TABLE>
<CAPTION>
                                               September 30,        June 30,
                                                    1996              1996
                                              _______________   _______________
<S>                                           <C>               <C>            
        Assets                                             
Cash and due from banks                       $    5,298,792    $    3,386,263 
Interest bearing deposits in other banks             560,365           650,430
Federal Home Loan Bank overnight deposits          6,881,000         7,529,435
Trading account securities at market                 196,298           197,621
Available for sale securities                     32,395,480        29,650,319
Federal Home Loan Bank stock                       2,980,100         2,656,200
Loans held for sale                                  390,384           448,475
                                                                     
Loans                                            173,238,611       170,140,264
  Less deferred loan origination fees                248,479           289,340
  Less allowance for loan losses                   2,487,000         2,549,000
                                              _______________   _______________
    Net loans                                    170,503,132       167,301,924

Bank premises and equipment, net                   3,521,672         3,576,386
Real estate held for investment                      458,748           459,820
Other real estate owned                              772,739           513,831
Goodwill (net of accumulated amortization 
  of $1,014,153 at 9/30/96 and $940,059 at 
  6/30/96)                                         2,483,820         2,557,913
Other assets                                       3,455,774         3,360,998
                                              _______________   _______________
    Total Assets                                 229,898,304       222,289,615
                                              ===============   ===============
                                                                       
Liabilities and Shareholders' Equity                                 
                                                                   
Liabilities                                                       
Deposits                                      $  145,544,632    $  145,195,369
Repurchase Agreements                              3,874,811         3,762,966
Advances from Federal Home Loan Bank              59,278,835        52,123,000
Notes payable                                      1,376,081         1,502,192
Other Liabilities                                  1,622,447         1,554,846
                                              _______________   _______________
  Total Liabilities                              211,696,806       204,138,373
                                                                       
Shareholders' Equity                                                 
Preferred stock, Series A, 45,454                                    
  shares issued and outstanding                      999,988           999,988
Preferred stock, Series B, 71,428 
  shares issued and outstanding                      999,992           999,992
Common stock, par value $1,1,234,010 shares                
  issued at 9/30/96 and 6/30/96.  1,231,294                 
  and 1,229,910 shares outstanding at                          
  9/30/96 and 6/30/96, respectively                1,234,010         1,234,010
Additional paid in capital                         5,455,506         5,455,852
Retained earnings                                 10,401,790        10,351,031
                                              _______________   _______________
                                                  19,091,286        19,040,873
Net unrealized loss on available for sale 
  securities                                        (855,156)         (837,354)
Treasury Stock at cost 2,716 shares at 
  9/30/96 and 4,100 shares at 6/30/96                (34,632)          (52,277)
                                              _______________   _______________
  Total Shareholders' Equity                      18,201,498        18,151,242
                                              _______________   _______________
  Total Liabilities and Shareholders' Equity  $  229,898,304    $  222,289,615
                                              ===============   ===============
</TABLE>

NORTHEAST BANCORP AND SUBSIDIARY
Consolidated Statements of Income
(Unaudited)

<TABLE>
<CAPTION>

                                                      Three Months Ended
                                                         September 30,
                                                     1996             1995
                                                ______________   ______________
<S>                                             <C>              <C>           
Interest and Dividend Income
Interest on FHLB overnight deposits             $      88,064    $     181,565 
Interest on loans & loans held for sale             3,987,260        4,098,163
Interest on investment securities & 
  available for sale securities                       590,010          160,580
Dividends on Federal Home Loan Bank stock              46,409           36,850
Other Interest Income                                   4,891            5,498
                                                ______________   ______________
  Total Interest Income                             4,716,634        4,482,656

Interest Expense
Deposits                                            1,539,567        1,635,482
Repurchase agreements                                  38,269           33,913
Other borrowings                                      854,846          599,959
                                                ______________   ______________
  Total Interest Expense                            2,432,682        2,269,354
                                                ______________   ______________
Net Interest Income                                 2,283,952        2,213,302
Provision for loan losses                             144,814          147,855 
                                                ______________   ______________
  Net Interest Income after Provision for 
     Loan Losses                                    2,139,138        2,065,447

Other Income
Service charges                                       267,949          281,609
Available for sale securities gains (losses)           28,300          120,593
Gain (Loss) on trading account                         61,366              --  
Other                                                 148,069          212,091
                                                ______________   ______________
  Total Other Income                                  505,684          614,293

Other Expenses
Salaries and employee benefits                      1,024,525        1,043,248
Net occupancy expense                                 126,970          121,896
Equipment expense                                     177,028          168,288
Goodwill amortization                                  74,094           74,335
FDIC Insurance Assessment                             380,000              --  
Other                                                 561,212          608,156
                                                ______________   ______________
  Total Other Expenses                              2,343,829        2,015,923
                                                ______________   ______________
Income Before Income Taxes                            300,993          663,817
Income tax expense                                   116,732          242,180
                                                ______________   ______________
Net Income                                      $     184,261    $     421,637
                                                ==============   ==============

Earnings Per Share
  Primary                                       $        0.11    $        0.32 
  Fully Diluted                                 $        0.11    $        0.29

</TABLE>


NORTHEAST BANCORP AND SUBSIDIARY
Consolidated Statements of Changes in Shareholders' Equity
Three Months Ended September 30, 1996 and 1995
(Unaudited)

<TABLE>
<CAPTION>
                                                                                    Net
                                                                                 Unrealized
                                                                                Gains(Losses)   
                                                      Additional                on Available
                                Common    Preferred    Paid-In      Retained      for Sale       Treasury 
                                Stock       Stock      Capital      Earnings     Securities       Stock          Total  
                             ____________ ___________ ___________ _____________ ____________  _____________  ____________
<S>                          <C>          <C>         <C>         <C>           <C>           <C>            <C>         
Balance at June 30, 1995     $   547,502  $1,999,980  $4,643,059  $ 10,180,244  $   (95,507)   $         0   $17,275,278 
Net income for three months 
  ended September 30, 1995           --          --          --        421,637          --             --        421,637 
Dividends paid on common 
  stock                              --          --          --        (43,810)         --             --        (43,810)
Dividends paid on preferred 
  stock                              --          --          --        (35,000)         --             --        (35,000)
Issuance of common stock             123         --        2,521           --           --             --          2,644 
Common stock warrants 
  exercised                       50,000         --      650,000           --           --             --        700,000
Net change in unrealized
  losses on securities 
  available for sale                 --          --          --            --       (27,717)           --        (27,717)
                             ____________ ___________ ___________ _____________ ____________  _____________  ____________
Balance September 30, 1995   $   597,625  $1,999,980  $5,295,580  $ 10,523,071  $  (123,224)  $          0   $18,293,032 
                             ============ =========== =========== ============= ============  =============  ============

Balance at June 30, 1996       1,234,010   1,999,980   5,455,852    10,351,031     (837,354)       (52,277)   18,151,242 
Net income for three months 
  ended September 30, 1996           --          --          --        184,261          --             --        184,261
Dividends paid on common 
  stock                              --          --          --        (98,503)         --             --        (98,503)
Dividends paid on preferred 
  stock                              --          --          --        (34,999)         --             --        (34,999)
Issuance of common stock             --          --         (346)          --           --          17,645        17,299
Net change in unrealized 
  losses on securities 
  available for sale                 --          --          --            --       (17,802)           --        (17,802)
                             ____________ ___________ ___________ _____________ ____________  _____________  ____________
Balance September 30, 1996   $ 1,234,010  $1,999,980  $5,455,506  $ 10,401,790  $  (855,156)  $    (34,632)  $18,201,498 
                             ============ =========== =========== ============= ============  =============  ============
</TABLE>


NORTHEAST BANCORP AND SUBSIDIARY
Consolidated Statements of Cash Flow
(Unaudited)

<TABLE>
<CAPTION>

                                                      Three Months Ended
                                                         September 30,
                                                     1996             1995 
                                                ______________   ______________
<S>                                             <C>              <C>           
Cash provided by operating activities           $     542,157    $       6,862 

Cash flows from investing activities:                                         
  FHLB stock purchased                               (323,900)             --  
  Available for sale securities purchased          (8,763,065)      (8,572,245)
  Available for sale securities principal 
    reductions                                        572,283          154,533
  Available for sale securities sold                5,447,793        8,467,522
  New loans, net of repayments & charge offs       (3,741,933)       2,146,169
  Net capital expenditures                            (60,543)        (107,654)
  Real estate owned sold                              126,608            8,157 
  Real estate held for investment purchased               --           (56,096)
  Real estate held for investment sold                    --            30,000 
                                                ______________   ______________
    Net cash provided by (used in) investing 
      activities                                   (6,742,757)       2,070,386 
                                                 
Cash flows from financing activities:                                         
  Net change in deposits                              349,263          651,422
  Net change in repurchase agreements                 111,845        1,204,649
  Dividends paid                                     (133,502)         (78,810)
  Proceeds from stock issuance                         17,299          702,645
  Net (decrease) increase in advances from                   
    Federal Home Loan Bank of Boston                7,155,835       (2,000,000)
  Net change in notes payable                        (126,111)        (127,683)
                                                ______________   ______________
    Net cash provided by financing activities       7,374,629          352,223 
                                                ______________   ______________
    Net (decrease) increase in cash and cash 
      equivalents                                   1,174,029        2,429,471 

Cash and cash equivalents, beginning of period     11,566,128       14,740,070 
                                                ______________   ______________
Cash and cash equivalents, end of period        $  12,740,157    $  17,169,541 
                                                ==============   ==============

Cash and cash equivalents include cash on hand,
  amounts due from banks, interest bearing 
  deposits and federal funds sold


Supplemental schedule of noncash investing 
  activities:
Net increase (decrease) in valuation for 
  unrealized market value adjustments on
  available for sale securities                       (17,802)         (27,717)
Net transfer (to) from Loans to Other Real 
  Estate Owned                                        447,039         (251,771)

Supplemental disclosure of cash paid during 
  the period for:
Income taxes paid, net of refunds                         --             1,500
Interest paid                                       2,391,111        2,278,724

</TABLE>

NORTHEAST BANCORP AND SUBSIDIARY
Notes to Consolidated Financial Statements
September 30, 1996

1.   Basis of Presentation
     _____________________

The accompanying unaudited condensed and consolidated financial statements have
been prepared in accordance with generally accepted accounting principles 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 generally accepted accounting principles
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 three month 
period ended September 30, 1996 are not necessarily indicative of the results 
that may be expected for the year ending June 30, 1997.  For further 
information, refer to the audited consolidated financial statements and 
footnotes thereto for the fiscal year ended June 30, 1996 included in the 
Company's annual report on Form 10-K.

2.   Securities
     __________

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

<TABLE>
<CAPTION>
                              September 30, 1996            June 30, 1996
                           _________________________  _________________________
                                           Market                     Market
                               Cost        Value          Cost        Value
                           ____________ ____________  ____________ ____________
<S>                        <C>          <C>           <C>          <C>         
Debt securities issued by                                                  
 the U.S. Treasury and                                                       
 other U.S. Government                                                         
 corporations and agencies $ 1,250,000  $ 1,222,338   $ 1,497,111  $ 1,424,690 
Corporate bonds                149,658      139,828       149,646      139,005
Mortgage-backed securities  31,666,203   30,475,543    28,810,113   27,646,294
Equity securities              625,310      557,771       462,167      440,330
                           ____________ ____________  ____________ ____________
                           $33,691,171  $32,395,480   $30,919,037  $29,650,319 
                           ============ ============  ============ ============


                              September 30, 1996            June 30, 1996
                           _________________________  _________________________
                                           Market                     Market
                               Cost        Value          Cost        Value
                           ____________ ____________  ____________ ____________
Due in one year or less            --           --    $   247,111  $   246,790 
Due after one year through              
  five years                   250,000      239,525       250,000      237,900 
Due after five years                                                         
  through ten years            149,658      139,828       149,646      139,005 
Due after ten years          1,000,000      982,813     1,000,000      940,000 
Mortgage-backed securities                                                
  (including securities                                                  
  with interest rates                                                  
  ranging from 5.15% to                                                
  8.5% maturing September                                              
  2003 to August 2026)      31,666,203   30,475,543    28,810,113   27,646,294
Equity securities              625,310      557,771       462,167      440,330
                           ____________ ____________  ____________ ____________
                           $33,691,171  $32,395,480   $30,919,037  $29,650,319
                           ============ ============  ============ ============
</TABLE>

3.   Allowance for Loan Losses

The following is an analysis of transactions in the allowance for loan losses:
 
<TABLE>
<CAPTION>
                                                        Three Months Ended
                                                           September 30,
    
                                                        1996           1995
                                                    ____________   ____________
<S>                                                 <C>            <C>         
Balance at beginning of year                        $ 2,549,000    $ 2,396,000 
Add provision charged to operations                     144,814        147,855
Recoveries on loans previously charged off               21,431          6,842
                                                    ____________   ____________
                                                      2,715,245      2,550,697 
   Less loans charged off                               228,245         56,697 
                                                    ____________   ____________
  Balance at end of period                          $ 2,487,000    $ 2,494,000 
                                                    ============   ============
</TABLE>

4.   Advances from Federal Home Loan Bank

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

<TABLE>
<CAPTION>
                        September 30, 1996
          _______________________________________________
            Principal         Interest         Maturity
             Amounts            Rates           Dates
          ______________   _______________   ____________ 
          <C>              <C>               <C>
          $  30,100,000     5.17% - 6.87%        1997
             10,243,800     4.97% - 6.39%        1998
             14,500,000     5.64% - 5.96%        1999
              1,965,953     6.21% - 6.49%        2001
              2,469,082     6.36% - 6.67%        2003
          ______________                           
          $  59,278,835                           
          ==============                            

                          June 30, 1996       
         ________________________________________________
            Principal         Interest         Maturity           
             Amounts            Rates           Dates              
         _______________   _______________   ____________ 
         $   31,400,000     5.17% - 8.30%        1997
              5,573,000     4.97% - 6.86%        1998
             14,500,000     5.64% - 6.35%        1999
                325,000         6.40%            2001
                325,000         6.61%            2003
        ________________   _______________   ____________
        $    52,123,000
        ================


5.   New Accounting Pronouncements

On March 31, 1995, FASB issued Statement of Financial Accounting Standards No. 
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived 
Assets to Be Disposed of" ("Statement 121").   Statement 121 provides guidance 
for recognition and measurement of impairment of long-lived assets, certain 
identifiable intangibles and goodwill related both to assets to be held and 
used and assets to be disposed of.  Statement 121 requires entities to perform 
separate calculations for assets to be held and used to determine whether 
recognition of an impairment loss is required and, if so, to measure the 
impairment.  Statement 121 requires long-lived assets and certain identifiable 
intangibles to be disposed of to be reported at the lower of carrying amount or
fair value less cost to sell, except for assets covered by the provisions of 
APB Opinion No. 31.  Statement 121 is effective for financial statements issued
for fiscal years beginning after December 15, 1995.  The Company adopted 
Statement 121 on July 1, 1996; the effect of adopting the new rules did not 
have a significant effect on the financial condition, liquidity, or results of 
operations of the Company.

In May 1995, FASB issued Statement No. 122, Accounting for Mortgage Servicing 
Rights, an amendment of FASB Statement No. 65, ("Statement 122").  Statement 
122 is effective for fiscal years beginning after December 15, 1995.  The 
Company adopted Statement 122 in its first quarter of fiscal year 1997.  
Statement 122 requires that a mortgage banking enterprise recognize as separate
assets the rights to service mortgage loans for others.  Statement 122 also 
requires the assessment of capitalized mortgage servicing rights for impairment
to be based on the current fair value of those rights.  This assessment 
includes servicing rights capitalized prior to adoption of Statement 122.  The 
Adoption of Statement 122 was not material to the Company's financial position,
liquidity, or results of operations.

In October 1995, FASB issued Statement No. 123, Accounting for Stock-Based 
Compensation ("Statement 123"), which became effective on July 1, 1996 for the 
Company.  Statement 123 established a fair value based method of accounting for
stock-based compensation plans under which compensation cost is measured at the
grant date based on the value of the award and is recognized over the service 
period.  However, the statement allows a company to continue to measure 
compensation cost for such plans under Accounting Principles Board (APB) 
Opinion No. 25, Accounting for Stock Issued to Employees.  Under APB Opinion 
No. 25, no compensation cost is recorded if, at the grant date, the exercise 
price of the options is equal to the fair market value of the Company's common 
stock.  The Company has elected to continue to follow the accounting under APB 
Opinion No. 25.  Statement 123 requires companies which elect to continue to 
follow APB Opinion No. 25 to disclose in the notes to their annual financial
statements pro forma net income and earnings per share as if the value based 
method of accounting had been applied.

                     NORTHEAST BANCORP AND SUBSIDIARY
                                  Part I.

Item 2. Management's Discussion and Analysis of Financial Condition and Results
        _______________________________________________________________________
        of Operation
        ____________

Financial Condition 
___________________

Total consolidated assets at September 30, 1996 were $229,898,304, which was an
increase of $7,608,689 from June 30, 1996.  Total loans increased by 
$3,201,208, while securities and cash equivalents increased by $3,067,738 and 
$1,174,029, respectively during the same period.  Total deposits increased by 
$349,263, total repurchase agreements increased by $111,845, and total 
borrowings from the Federal Home Loan Bank (FHLB) increased by $7,155,835 from 
June 30, 1996 to September 30, 1996.

Cash and due from banks has increased by $1,912,529, from fiscal year end, due 
to large cash items cleared through the Federal Reserve Bank and the Maine 
clearing house on September 30, 1996.  FHLB overnight deposits decreased by 
$648,435 due to the use of cash to support the increase in the loan and 
investment portfolios.

Total loans increased by $3,201,208 for the three months ended September 30, 
1996.  The loan portfolio growth was in  1-4 family mortgages and commercial 
loans.  The Company's local market as well as the secondary market has become 
and continues to be very competitive for loan volume.  The local competitive 
environment and  customers response to favorable secondary market rates have 
affected the Company's ability to increase the loan portfolio.  In an effort to
increase loan volume, the Company's offering rates for its loan products has 
been reduced to compete in various markets. While the loan portfolio has 
increased in the first quarter of this fiscal year, the Company will experience
some margin compression due to decreased loan rates.

The loan portfolio contains elements of credit and interest rate risk.  The 
Company primarily lends within its local market areas, which management 
believes helps it to better evaluate credit risk.  The Company also maintains a
well collateralized position in real estate mortgages. Residential real estate 
mortgages make up 69% of the total loan portfolio, in which 47% of the 
residential loans are variable rate products.  It is management's intent to 
increase the proportion of variable rate residential loans, by selling fixed 
rate loans to the secondary market and maintaining portfolio variable rate 
loans, to reduce the interest rate risk in this area.

Fifteen percent of the Company's total loan portfolio balance is commercial 
real estate mortgages. Similar to the residential mortgages, the Company tries 
to mitigate credit risk by lending in its local market area as well as 
maintaining a well collateralized position in the real estate.  The commercial 
real estate loans have minimal interest rate risk as 87% of the portfolio 
consists of variable rate products. 

Commercial loans make up 9% of the total loan portfolio, in which 83% of its 
balance are variable rate instruments.  The credit loss exposure on commercial 
loans is highly dependent on the cash flow of the customer's business.  The 
Company's subsidiary, Northeast Bank, FSB (the "Bank"), attempts to mitigate 
losses in commercial loans through lending in accordance to the Company's 
credit policy guidelines established by the Bank's Board of Directors.

Consumer and other loans make up 7% of the loan portfolio.  Since these loans 
are primarily fixed rate products, they have interest rate risk when market 
rates increase.  These loans also have credit risk with, at times, minimal 
collateral security. Management attempts to mitigate these risks by keeping the
products offered short-term, receiving a rate of return commensurate with the 
measured risks, and lending to individuals in the Company's known market areas.

Other real estate owned has increased by $258,908 from June 30, 1996 to 
September 30,1996.  This increase was attributable to foreclosures on loan 
collateral.

The Bank continues to attract new deposit relationships.  Total deposits were 
$145,544,632 and securities sold under repurchase agreements were $3,874,811 as
of September 30, 1996.  These amounts represent increases of $349,263 and 
$111,845, respectively, when compared to June 30, 1996.  Brokered deposits 
represented $4,859,868 of the total deposits for the quarter ended September 
30, 1996 a decrease of $787,270 compared to June 30, 1996.  The Company 
utilizes, as alternative sources of funds, brokered CD's when the national 
brokered CD interest rates are less than the interest rates on local market 
deposits.  Brokered deposits are similar to local deposits, in that both are 
interest rate sensitive with the respect to the Company's ability to retain the
funds. 

Total advances from the Federal Home Loan Bank were $59,278,835 as of September
30, 1996,  an increase of $7,155,835 from June 30, 1996.  The cash received 
from FHLB advances was utilized for the increase in  loans and investments.  
The Company's current advance availability, subject to the satisfaction of 
certain conditions, is approximately $41,200,000 over and above the September 
30, 1996 advances reported.  Mortgages, free of liens, pledges and encumbrances
are required to be pledged to secure FHLB advances.  The Company utilizes 
Federal Home Loan Bank advances to fund short-term liquidity demand for loan 
volume and as an alternative sources of funds when the interest rates of the
advances are less than market deposit interest rates.  With the borrowing 
capacity at the Federal Home Loan Bank and the continued growth in bank 
deposits and repurchase agreements, management believes that the Company's 
available liquidity resources are sufficient to support future loan growth.

Total equity of the Company was at $18,201,498 as of September 30, 1996 versus 
$18,151,242 at June 30, 1996.   Book value per common share was $13.16 as of 
September 30, 1996 versus $13.13 at June 30, 1996.  Total equity to total 
assets of the Company as of September 30, 1996 was 7.92%.

At September 30, 1996, the Bank's regulatory capital was in compliance with 
regulatory capital requirements as follows:


</TABLE>
<TABLE>
<CAPTION>

                                                                 Northeast
                                                               Bank, F.S.B.
                                                              _______________
<S>                                                           <C>
Capital Requirements:
Tangible capital                                              $   3,417,000  
  Percent of tangible assets                                           1.50%
Core capital                                                  $   6,835,000
  Percent of adjusted tangible assets                                  3.00%
Leverage capital                                              $   9,113,000
  Percent of adjusted leverage assets                                  4.00%
Risk-based capital                                            $  10,865,000
  Percent of risk-weighted assets                                      8.00%

Actual:
Tangible capital                                              $  16,000,000
  Percent of adjusted total assets                                     7.02%
  Excess of requirement                                       $   6,535,000
Core capital                                                  $  16,000,000
  Percent of adjusted tangible assets                                  7.02%
  Excess of requirement                                       $   9,165,000
Leverage capital                                              $  16,000,000
  Percent of adjusted leverage assets                                  7.02%
  Excess of requirement                                       $   6,887,000
Risk-based capital                                            $  17,094,000
  Percent of risk-weighted assets                                     12.59%
  Excess of requirement                                       $   6,229,000

</TABLE>

The carrying value of securities available for sale of the Company was 
$32,395,480, which is $1,295,691 less than the cost of the underlying 
securities, at September 30, 1996.  The difference from the cost and the 
carrying value of the securities was primarily due to the decline in market 
value of mortgage-backed securities, which was due to the change in current 
market prices from the prices at the time of purchase.  The Company has 
primarily invested in mortgage-backed securities.  Substantially  all of the 
mortgage-backed securities are high grade government backed securities.   As in
any long term earning asset in which the earning rate is fixed, the market 
value of mortgage-backed securities will decline when market interest rates 
increase from the time of purchase.  Since these mortgage-backed securities are
backed by the U.S. government, there is little or no risk in loss of principal.
Management believes that it would be advantageous to hold these securities 
until the market values recover and the that yields currently received on this 
portfolio are satisfactory.

The Company increased its investment in FHLB stock by $323,900, compared to 
June 30, 1996, due to the increase in FHLB borrowings.  The FHLB requires 
institutions to hold a certain level of FHLB stock based on advances 
outstanding.

The Company's allowance for loan losses was $2,487,000 as of September 30, 1996
versus $2,549,000 as of June 30, 1996, representing 1.44% and 1.50% of total 
loans, respectively.  The Company had non-performing loans totaling $2,345,000 
at September 30, 1996 compared to $2,603,000 at June 30, 1996.  Non-performing 
loans represented 1.02% and 1.17% of total assets at September 30 and June 30, 
1996, respectively.  The Company's allowance for loan losses was equal to 106% 
and 98% of the total non-performing loans at September 30, 1996 and June 30, 
1996, respectively.  At September 30, 1996, the Company had approximately 
$1,500,000 of loans classified substandard, exclusive of the non-performing 
loans stated above, that could potentially become non-performing due to 
delinquencies or marginal cash flows.  The loans classified substandard, as of 
September 30, 1996, have decreased from the June 30, 1996 amount of $2,541,000.
This decrease was attributed to the reclassification of loans to lower risk 
classifications as a result of favorable changes in the borrower's financial 
condition, indicating a decreased potential for these loans becoming 
non-performing assets.   Even though substandard loans decreased, there is a 
continuation of economic weakness in the Oxford county region served by the 
Bank.  Along with non-performing and delinquent loans, management takes an
aggressive posture in reviewing its loan portfolio to classify loans 
substandard.  The following table represents the Company's non-performing loans
as of September 30 and June 30, 1996, respectively:

<TABLE>
<CAPTION>
                           September 30,        June 30,
      Description              1996              1996
_______________________   _______________   _______________
<S>                        <C>               <C>
1-4 Family Mortgages      $   1,224,000     $   1,092,000
Commercial Mortgages            781,000         1,154,000
Commercial Installment          304,000           283,000
Consumer Installment             36,000            74,000
                          _______________   _______________
  Total non-performing    $   2,345,000     $   2,603,000
                          ===============   ===============
</TABLE>

The majority of the non-performing loans are seasoned loans located in the 
Oxford county area.  This geographic area continues to have a depressed economy
resulting in high unemployment and a soft real estate market.  As a result, 
management has allocated substantial resources to collections in an effort to 
control the growth in non-performing, delinquent and substandard loans.  The 
Company has decreased its total delinquent accounts during the September 30, 
1996 quarter.  The reduction was largely  due to collection efforts of the 30 
and 60 day delinquent accounts as well as the transfer of non-performing loans
to real estate owned.

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

<TABLE>
<C>            <C>           <C>             <C>
12-31-95       3-31-96       6-30-96         9-30-96
  3.51%         2.82%         2.77%           1.53%

</TABLE>

While the level of the allowance for loan losses as a percentage of total loans
at September 30, 1996 decreased from June 30, 1996, the level of the allowance 
for loan losses as a percentage of non-performing loans and total delinquencies
as a percentage of total loans improved during the quarter ended September 30, 
1996.  Loans classified substandard decreased from June 30, 1996 to September 
30, 1996.  Based on reviewing the credit risk and collateral of delinquent, 
non-performing and classified loans, management considers the allowance for 
loan losses to be adequate. 

On a regular and ongoing basis, Company management evaluates the adequacy of 
the allowance for loan losses.  The process to evaluate the allowance involves 
a high degree of management judgement.  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. 

The state of Maine's economy, in which the Bank operates, including the south 
central region of Cumberland, Androscoggin and Sagadahoc counties has 
stabilized with moderate growth, although the economy in the western region of
Oxford county remains weak.  Based on the different economic conditions in the 
Bank's market areas, management of the Company continues to carefully monitor 
the exposure to credit risk at the Bank.

While management uses its best judgement in recognizing loan losses in light of
available information, 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 Company's allowance for loan losses.  Such 
agencies may require the Company to recognize additions to the allowance for 
loan losses based on their judgements about information available to them at 
the time of their examination.  The Company's most recent examination by the 
OTS was on August 19, 1996.  At the time of the exam the regulators proposed no
additions to the allowance for loan losses.

Results of Operations
_____________________

Net income for the quarter ended September 30, 1996 was $184,261.  The primary 
and fully diluted earnings per share were $.11 for the quarter ended September 
30, 1996.  This compares to earnings of $421,637, or primary earnings per share
of $.32 and fully diluted earnings per share of $.29, for the quarter ended 
September 30, 1995.  The 1995 earnings per share have been restated as a result
of the Company's 100% stock dividend in December, 1995.

The reduction in net income for the quarter ended September 30, 1996, compared 
to the quarter ended September 30, 1995 was due to the FDIC special insurance 
assessment on thrift SAIF deposits.  In September of 1996, Congress enacted 
comprehensive legislation amending the FDIC BIF-SAIF deposit insurance 
assessment on savings and loan institution deposits.  The legislation imposed a
one-time assessment on institutions holding SAIF deposits on March 31,1995, in 
an amount necessary for the SAIF to reach its 1.25% Designated Reserve Ration.
Institutions with SAIF deposits will be required to pay an up-front assessment 
rate of 65.7 cents per $100 of domestic deposits held as of March 31, 1995.  
The Bank held approximately $57,900,000 of SAIF deposits as of March 31, 1995,
which resulted in a first quarter expense of $380,000 to the Company.  This one
time assessment decreased the Company's primary earnings per share by $.19 and 
the fully diluted earnings per share by $.16 for the quarter ended September 
30, 1996.  Commencing in 1997 and continuing through 1999, the Bank is required
to pay an annual assessment of 1.29 cents for every $100 of domestic BIF 
insured deposits and 6.44 cents for every $100 of domestic SAIF insured 
deposits.  At the Bank's current deposit level of former SAIF deposits, the 
1997 annual assessment would be approximately $47,000.  Commencing in 2000 and 
continuing through 2017, banks will be required to pay a flat annual assessment
of 2.43 cents for every $100 of domestic deposits.  If there are no additional 
deposit insurance assessments in the future, it is anticipated that the Company
will save approximately $95,000 annually commencing in fiscal 1998.

The Company's net interest income was $2,283,952 for the quarter ended 
September 30, 1996, versus $2,213,302 for the quarter ended September 30, 1995,
an increase of $70,650.  Total interest income increased $233,978 during the 
three months ended September 30, 1996 compared to the three months ended 
September 30, 1995, resulting from the following items: (I)  Interest income on
loans and loans held for sale decreased by $110,903 for the three months ended 
September 30, 1996 resulting from a $19,374 increase due to an increase in the 
volume of loans, which was more than offset by a decrease of $130,277 due to 
decreased rates on loans. (II)  Interest income on investment securities 
increased by $438,989 resulting from a $402,776 increase due to an increase in 
volume as well as an increase of $36,213 due to increased rates on investments.
(III) Interest income on short term liquid funds decreased by $94,108 resulting
from a  $78,738 decrease due to a decrease in volume as well as a decrease of 
$15,370 due to decreased rates on FHLB overnight deposits.

The increase in total interest expense of $163,328 for the three months ended 
September 30, 1996 resulted from the following items: (I)  Interest expense on 
deposits decreased by $95,915 for the three months ended September 30, 1996 
resulting from a $25,225 decrease due to a decrease in the volume of deposits 
as well as a decrease of $70,690 due to decreasing deposit rates. (II)  
Interest expense on repurchase agreements increased $4,356 due to an increase 
in the volume of repurchase agreements offset by a decrease of $5,103 due to a 
decrease in rates. (III) Interest expense on borrowings increased $254,887 for 
the three months ended September 30, 1996 resulting from an increase of  
$344,042 due to an increase in the volume of borrowings  offset by a decrease 
of $89,155 due to a change in the mix of interest rates on borrowings.  The 
changes in net interest income, as explained above, are also presented in the 
schedule below.


                               Northeast 
                                Bancorp
              Rate/Volume Analysis for the three months ended
               September 30, 1996 versus September 30, 1995


<TABLE>
<CAPTION>
                                         Difference Due to
                                         Volume       Rate       Total
                                       __________  __________  __________
<S>                                    <C>         <C>         <C>  
Investments                            $ 402,776   $  36,213   $ 438,989   
Loans                                     19,374    (130,277)   (110,903)  
FHLB & Other Deposits                    (78,738)    (15,370)    (94,108)
                                       __________________________________
  Total                                  343,412    (109,434)    233,978  
                                                                           
Deposits                                 (25,225)    (70,690)    (95,915)
Repurchase Agreements                      9,459      (5,103)      4,356
Borrowings                               344,042     (89,155)    254,887
                                       __________________________________
  Total                                  328,276    (164,948)    163,328
                                       __________________________________
    Net Interest Income                $  15,136   $  55,514   $  70,650
                                       ==================================
</TABLE>

        Rate/Volume amounts spread proportionately between volume and rate.


The majority of the Company's income is generated from the Bank.  Management 
believes that the Bank is slightly asset sensitive based on its own internal 
analysis which considers its core deposits long term liabilities that are 
matched to long term assets; therefore, it will generally experience a 
contraction in its net interest margins during a period of falling rates.  
Management believes that the maintenance of a slight asset sensitive position 
is appropriate since historically interest rates tend to rise faster than they 
decline.  Approximately 20% of the Company's loan portfolio is comprised of 
floating rate loans based on a prime rate index.  Interest income on these 
existing loans will increase as the prime rate increases, as well as on 
approximately 32% of other loans in the Company's portfolio that are based on 
short-term rate indices such as the one-year treasury bill.  An increase in 
short-term interest rates will also increase deposit and Federal Home Loan Bank
advance rates, increasing the Company's interest expense.  The Company is 
experiencing and anticipates additional net interest margin compression due to 
fluctuating rates.  The impact on net interest income will depend on, among 
other things, actual rates charged on the Company's loan portfolio, deposit and
advance rates paid by the Company and loan volume.

Total non-interest income was $505,684 for the three months ended September  
30, 1996 versus $614,293 for the three months ended September 30, 1995.  
Service fee income was $267,949 for the quarter ended September 30, 1996 versus
$281,609 for the quarter ended September 30, 1995.  The $13,660 service fee 
decrease was primarily due to the reduction in loan fee income.  Income from 
available for sale securities gains was $28,300 for the three months ended 
September 30, 1996 versus $120,593 for the three months ended September 30, 
1995.  Gains from the sale of securities decreased in the September 30, 1996 
quarter by $92,293 compared to the quarter ended September 30, 1995.  The  
Company sold some of its available for sale securities in the September 30, 
1995 quarter, taking advantage of the fluctuation in market prices in the 
mortgage-backed security portfolio.  Income from trading account securities was
$61,366 and $0 for the three months ended September 30, 1996 and 1995, 
respectively.  The gain on trading account, in the September 30, 1996 quarter, 
was due to the sale and appreciation in market value of the securities 
classified as trading.

Other income was $148,069 for the three months ended September 30, 1996, which 
was a $64,022 decrease from the September 30, 1995 $212,091 balance.  The 
reduction in other income was primarily due to the decrease in gains on the 
sale of loans held for sale, which amounted to $19,879 for the three months 
ended September 30, 1996 versus $82,815 for the three months ended September 
30, 1995.  The reduction in gains from the sale of loans was due to decreased 
secondary market activity.

Total operating expense, or non-interest expense, for the Company was 
$2,343,829 for the three months ended September 30, 1996 versus $2,015,923 for 
the three months ended September 30, 1995.  As previously discussed above, the 
Company's operating expenses increased primarily due to the FDIC-SAIF deposit 
insurance assessment of $380,000.  Excluding the FDIC-SAIF deposit assessment, 
the Company's total operating expense was $1,963,829 for the three months ended
September 30,1996, which was a decrease of $52,094 when compared to the three 
months ended September 30, 1995.

Cash provided by operating activities increased by $535,295 for the three 
months ended September 30, 1996.  During the quarter ended September 30, 1995 
there was a reduction in cash from operating activities due to the increase in 
assets held for sale of $616,000.

On July 1, 1996 the Company adopted the Financial Accounting Standards Board 
Statement of Financial Accounting Standards No. 122 , Accounting for Mortgage 
Servicing Rights, ("Statement 122").  Statement 122 requires that a mortgage 
banking enterprise recognize as separate assets the rights to service mortgage 
loans for others.  Statement 122 also requires the assessment of capitalized 
mortgage servicing rights for impairment to be based on the current fair value 
of those rights.  This assessment includes servicing rights capitalized prior 
to adoption of Statement 122.  The adoption of Statement 122 was not material 
to the Company's financial position, liquidity, or results of operations.

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 many 
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.

                    NORTHEAST BANCORP AND SUBSIDIARY
                    Part II - Other Information

Item 1.  Legal Proceedings
         _________________     
Not Applicable.

Item 2.  Changes in Securities
         _____________________
Not Applicable.

Item 3.   Defaults Upon Senior Securities
          _______________________________
Not Applicable.

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

       SUMMARY OF VOTING AT 10/23/96 ANNUAL SHAREHOLDERS' MEETING
       __________________________________________________________ 
At the Annual Meeting of Shareholders held in Auburn, Maine on October 23, 
1996, the following proposals were approved, each proposal receiving the vote 
of the Company's outstanding common and preferred shares, voting  as one class,
as follows:

Proposal 1 - Election of Directors:

<TABLE>
<CAPTION>
                              Votes For     Votes Against    Votes Abstaining
                             ___________    _____________    ________________  
<S>                          <C>            <C>              <C>             
Joseph A. Aldred, Jr.         1,125,975           9,300              0 
A. William Cannan             1,125,975           9,300              0 
James D. Delamater            1,134,975             300              0
Normand R. Houde              1,120,413          14,862              0
Philip C. Jackson             1,135,075             200              0
Ronald C. Kendall             1,135,075             200              0
Robert Morrell                1,125,975           9,300              0 

</TABLE>

Mr. Aldred was elected to serve until the 1997 Annual Meeting.  Mr. Cannan was 
elected to serve until the 1998 Annual Meeting and Messrs.  Delamater, Houde, 
Jackson, Kendal and Morrell were elected to serve until the 1999 Annual 
Meeting.  The terms of the following Directors continued after the meeting: Ms.
Hayes and Messrs. Bouchard, Brown, Goguen, Trinward, Vachon, Wight,  and 
Wilson.  There was no solicitation in opposition to management's nominees, and 
all nominees were elected without contest.

Proposal 2 - Amendment to the Company's Articles of Incorporation to change its
name to Northeast Bancorp.

<TABLE>
<CAPTION>
      Votes For      Votes Against      Votes Abstaining      Broker Non-Votes
     ___________    _______________    __________________    __________________
     <C>            <C>                <C>                   <C>
      1,130,351          1,860               3,064                    0

</TABLE>

Proposal 3 - Appointment of Baker Newman & Noyes, Limited Liability Company as 
auditors for fiscal year 1997.
 
<TABLE>
<CAPTION>

                Votes For      Votes Against       Votes Abstaining
               ___________    _______________    __________________
               <C>            <C>                <C>
                1,133,935           100                 1,240 

</TABLE>

Item 5.  Other Information
          _________________
Not Applicable.


Item 6.  Exhibits and Reports on Form 8 - K
         __________________________________

(a)  Exhibits
     ________

3.1  Conformed Articles of Incorporation of Northeast Bancorp as amended 
     October 23, 1996 are filed herewith as Exhibit 3.1.

11   Statement regarding computation of per share earnings is filed herewith as
     Exhibit 11.

27   Financial data schedule is filed herewith as exhibit 27.

(b)  Reports on Form 8 - K

     Not Applicable.


                       NORTHEAST BANCORP AND SUBSIDIARY
                               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.
                                    
                                    
                                    
                                    
                            NORTHEAST BANCORP             
                        ________________________
                              (Registrant)
                                                              
                                    
                         /s/ James D. Delamater            
                        ________________________
                           James D. Delamater
                            President and CEO
                                    
                                    
                            /s/ Richard Wyman               
                        ________________________
                              Richard Wyman
                         Chief Financial Officer
                                    
                                    
                                    
                                    
Date:  November 13, 1996


                       NORTHEAST BANCORP AND SUBSIDIARY
                              Index to Exhibits
                                      
                                    
EXHIBIT NUMBER                            DESCRIPTION                           

     3.1           Conformed Articles of Incoporation of Northeast Bancorp 
                     as amended October 23, 1996
     
    11             Statement regarding computation of per share earnings  

    27             Financial Data Schedule