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, 1997
                         ------------------  

                                            or

_____ Transition report pursuant 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)


<PAGE>  1
    232 Center Street, Auburn, Maine                     04210
________________________________________  ____________________________________
(Address of principal executive offices)               (Zip Code)

                                 (207) 777 - 5950
______________________________________________________________________________
               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 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 11, 1997:  1,481,734 of common stock, $1.00 
  par value per share.
_______________________________________________________________________________

                                    
                   NORTHEAST BANCORP AND SUBSIDIARIES
                            Table of Contents
                                    

Part I.   Financial Information

          Item 1.  Financial Statements (unaudited)
                    
                    Consolidated Balance Sheets
                    September 30, 1997 and June 30, 1997
                    
                    Consolidated Statements of Income
                    Three Months ended September 30, 1997 and 1996   
                     

<PAGE>  2
                    Consolidated Statements of Changes in Shareholders' Equity
                    Three Months ended September 30, 1997 and 1996 
                      
                    Consolidated Statements of Cash Flows
                    Three Months ended September 30, 1997 and 1996
                      
                    Notes to Consolidated Financial Statements
                    
          Item 2.   Management's Discussion and Analysis of Financial Condition
                    and Results of Operation
                    
          Item 3.   Quantitative and Qualitative Disclosure about Market Risk

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,
                                                  1997              1997
                                            _______________   _______________
<S>                                         <C>               <C>            
Assets                                                           
                                                                           
Cash and due from banks                     $   3,260,381     $   5,152,222
Interest bearing deposits in other banks          442,377           443,021
Federal Home Loan Bank overnight deposits      10,256,000        10,066,000
Trading account securities at market               25,000            25,000
Available for sale securities                  29,802,208        27,096,931
Federal Home Loan Bank stock                    4,192,700         3,949,700
Loans held for sale                                29,355           240,000

Loans                                         209,310,884       206,507,746
  Less deferred loan origination fees              54,371           151,609
  Less allowance for loan losses                2,560,000         2,517,000
                                            _______________   _______________
    Net loans                                 206,696,513       203,839,137

Bank premises and equipment, net                3,843,791         3,960,703
Real estate held for investment                   290,918           361,654
Other real estate owned                           456,641           492,411
Goodwill (net of accumulated amortization 
 of $1,310,528 at 9/30/97 and $1,236,434 
 at 6/30/97)                                    2,146,195         2,220,289
Other assets                                    3,999,629         3,952,638
                                            _______________   _______________  
    Total Assets                              265,441,708       261,799,706

<PAGE>  3
                                            ===============   ===============
                                                                             
Liabilities and Shareholder's Equity                                         
                                                                            
Liabilities                                                                  
Deposits                                    $ 154,262,801     $ 154,410,687
Repurchase Agreements                           4,840,375         5,098,622
Advances from Federal Home Loan Bank           80,574,471        78,993,361
Notes payable                                   1,222,222         1,298,611
Due to Broker                                   1,999,375            --     
Other Liabilities                               2,077,804         2,097,812
                                            _______________   _______________
  Total Liabilities                           244,977,048       241,899,093

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, 1,293,642 and 
 1,274,969 shares issued and outstanding at
 9/30/97 and 6/30/97, respectively              1,293,642         1,274,969
Additional paid in capital                      5,708,584         5,639,507
Retained earnings                              11,734,802        11,320,332
                                            _______________   _______________
                                               20,737,008        20,234,788
Net unrealized loss on available for sale 
 securities                                      (272,348)         (334,175)
                                            _______________   _______________
  Total Shareholders' Equity                   20,464,660        19,900,613
                                            _______________   _______________
Total Liabilities and Shareholders' Equity  $ 265,441,708     $ 261,799,706
                                            ===============   ===============
</TABLE>

                                    
                     NORTHEAST BANCORP AND SUBSIDIARY
                    Consolidated Statements of Income
                               (Unaudited)
                                    
<TABLE>
<CAPTION>                                    
                                                   Three Months Ended
                                                      September 30,
                                                 1997              1996    
                                            _______________   _______________
<S>                                         <C>               <C>           
Interest and Dividend Income                                              
Interest on FHLB overnight deposits         $     113,638     $      88,064
Interest on loans & loans held for sale         4,745,135         3,987,260
Interest on available for sale securities         465,281           590,010
Dividends on Federal Home Loan Bank stock          67,436            46,409
Other Interest Income                               4,783             4,891
                                            _______________   _______________
  Total Interest Income                         5,396,273         4,716,634

Interest Expense

<PAGE>  4
Deposits                                        1,692,682         1,539,567
Repurchase agreements                              48,438            38,269
Other borrowings                                1,163,074           854,846
                                            _______________   _______________
  Total Interest Expense                        2,904,194         2,432,682
                                            _______________   _______________

Net Interest Income                             2,492,079         2,283,952
Provision for loan losses                         153,500           144,814
                                            _______________   _______________
  Net Interest Income after Provision 
     for Loan Losses                            2,338,579         2,139,138

Other Income
Service charges                                   262,566           267,949
Available for sale securities gains (losses)      107,996            28,300
Gain (Loss) on trading account                      1,797            61,366
Other                                             167,947           148,069
                                            _______________   _______________
  Total Other Income                              540,306           505,684

Other Expenses
Salaries and employee benefits                  1,028,363         1,024,525
Net occupancy expense                             187,471           126,970
Equipment expense                                 194,630           177,028
Goodwill amortization                              74,094            74,094
FDIC Insurance Assessment                             --            380,000
Other                                             531,447           561,212
                                            _______________   _______________
  Total Other Expenses                          2,016,005         2,343,829
                                            _______________   _______________
Income Before Income Taxes                        862,880           300,993
Income tax  expense                               310,039           116,732
                                            _______________   _______________
Net Income                                  $     552,841     $     184,261
                                            ===============   ===============

Earnings Per Share
  Primary                                   $        0.38     $        0.11
  Fully Diluted                             $        0.34     $        0.11

</TABLE>



NORTHEAST BANCORP AND SUBSIDIARY
Consolidated Statements of Changes in Shareholders' Equity
Three Months Ended September 30, 1997 and 1996
(Unaudited)

<TABLE>
<CAPTION>
                                                                                      Net
                                                                                 Unrealized
                                                                                Gains(Losses)
<PAGE>  5
                                                      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, 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             314         --        3,343           --            --         13,642        17,299
Net change in unrealized                                             
 losses on securities                                              
 available for sale                  --          --          --            --        (17,802)          --        (17,802)
                             ____________ ___________ ___________ ___________   _____________  ____________  ____________
Balance September 30, 1996   $ 1,234,324  $1,999,980  $5,459,195  $10,401,790   $   (855,156)  $   (38,635)  $18,201,498
                             ============ =========== =========== ============  =============  ============  ============

Balance at June 30, 1997       1,274,969   1,999,980   5,639,507   11,320,332       (334,175)          --     19,900,613
Net income for three months       
 ended September 30, 1997            --          --          --       552,841            --            --        552,841
Dividends paid on common 
 stock                               --          --          --      (103,372)           --            --       (103,372)
Dividends paid on preferred
 stock                               --          --          --       (34,999)           --            --        (34,999)
Issuance of common stock  
 through exercise of options      18,673         --       69,077          --             --            --         87,750
Net change in unrealized
 losses on securities
 available for sale                  --          --          --           --          61,827           --         61,827
                             ____________ ___________ ___________ ____________  _____________  ____________  ____________
Balance September 30, 1997   $ 1,293,642  $1,999,980  $5,708,584  $11,734,802   $   (272,348)  $        0    $20,464,660

<PAGE>  6
                             ============ =========== =========== ============  =============  ============  ============
</TABLE>


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

<TABLE>
<CAPTION>
                                                    Three Months Ended
                                                      September 30,
                                                  1997              1996
                                             _______________   _______________
<S>                                          <C>               <C>            
Cash provided by operating activities        $      786,560    $      542,157 

Cash flows from investing activities:
 FHLB stock purchased                              (243,000)         (323,900)
 Available for sale securities purchased         (4,293,677)       (8,763,065)
 Available for sale securities principal 
  reductions                                        453,954           572,283
 Available for sale securities matured              250,000               --
 Available for sale securities sold               3,059,863         5,447,793
 New loans, net of repayments & charge offs      (2,859,463)       (3,741,933)
 Net capital expenditures                           (55,521)          (60,543)
 Real estate owned sold                              87,038           126,608
 Real estate held for investment sold                63,793               --
                                             _______________   _______________
   Net cash provided by (used in) investing 
    activities                                   (3,537,013)       (6,742,757)

Cash flows from financing activities:
 Net change in deposits                            (147,886)          349,263
 Net change in repurchase agreements               (258,247)          111,845
 Dividends paid                                    (138,370)         (133,502)
 Proceeds from stock issuance                        87,750            17,299
 Net increase in advances from Federal Home 
  Loan Bank of Boston                             1,581,110         7,155,835
 Net change in notes payable                        (76,389)         (126,111)
                                             _______________   _______________
   Net cash provided by financing activities      1,047,968         7,374,629
                                             _______________   _______________

   Net (decrease) increase in cash and 
    cash equivalents                             (1,702,485)        1,174,029

Cash and cash equivalents, beginning 
  of period                                      15,661,243        11,566,128
                                             _______________   _______________
Cash and cash equivalents, end of period     $   13,958,758    $   12,740,157
                                             ===============   ===============

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

<PAGE>  7
Supplemental schedule of noncash 
 investing activities:
Net increase (decrease) in valuation for 
 unrealized market value adjustments on
 available for sale securities                      61,827            (17,802)
Net transfer (to) from Loans to Other 
 Real Estate Owned                                  56,325            447,039

Supplemental disclosure of cash paid during 
 the period for:
Income taxes paid, net of refunds                    5,000                --
Interest paid                                    2,888,326          2,391,111



                     NORTHEAST BANCORP AND SUBSIDIARY
               Notes to Consolidated Financial Statements
                           September 30, 1997

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, 1997 are not necessarily indicative of the results 
that may be expected for the year ending June 30, 1998.  For further 
information, refer to the audited consolidated financial statements and 
footnotes thereto for the  fiscal year ended June 30, 1997 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>
<TABLE>
<CAPTION>

                             September 30, 1997            June 30, 1997
                         __________________________  __________________________
                                          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            $  3,497,759  $  3,434,907  $  1,498,913  $  1,455,788

<PAGE>  8
Corporate bonds               149,705       146,085       149,694       142,750
Mortgage-backed 
 securities                25,683,969    25,393,948    25,057,910    24,647,811
Equity securities             883,424       827,268       896,739       850,582
                         ____________  ____________  ____________  ____________
                         $ 30,214,857  $ 29,802,208  $ 27,603,256  $ 27,096,931
                         ============  ============  ============  ============

                             September 30, 1997            June 30, 1997
                         __________________________  __________________________

                                          Market                       Market
                             Cost         Value          Cost          Value
                         ____________  ____________  ____________  ____________

Due in one year or less  $    248,384  $    247,307  $    248,913  $    248,913
Due after one year 
 through five years           250,000       245,400       250,000       242,500
Due after five years 
through ten years             149,705       146,085       149,694       142,750
Due after ten years         2,999,375     2,942,200     1,000,000       964,375
Mortgage-backed                                                     
 securities (including                                                
 securities with interest                                             
 rates ranging from                                                    
 5.15% to 8.5% maturing                                             
 September 2003 to                                                    
 August 2027)              25,683,969    25,393,948    25,057,910    24,647,811
Equity securities             883,424       827,268       896,739       850,582
                         ____________  ____________  ____________  ____________
                         $ 30,214,857  $ 29,802,208  $ 27,603,256  $ 27,096,931
                         ============  ============  ============  ============ 
</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,
                                                  1997           1996
                                              ____________   ____________
<S>                                           <C>            <C>
Balance at beginning of year                  $  2,517,000   $  2,549,000
Add provision charged to operations                153,500        144,814
Recoveries on loans previously charged off          72,742         21,431
                                              ____________   ____________
                                                 2,743,242      2,715,245
Less loans charged off                             183,242        228,245
                                              ____________   ____________
Balance at end of period                      $  2,560,000   $  2,487,000

<PAGE>  9
                                              ============   ============
</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, 1997
             ___________________________________________________
                Principal         Interest          Maturity
                 Amounts            Rates             Dates
             _______________   _______________   _______________ 
             <C>               <C>               <C>                 
             $   57,257,126     4.97% - 6.39%         1998
                 14,500,000     5.64% - 5.96%         1999
                  3,000,000         6.27%             2000
                  1,626,435     6.21% - 6.49%         2001
                  2,190,910     6.36% - 6.67%         2003
                  2,000,000         6.65%             2005
             _______________
             $   80,574,471
             ===============
                                
                               
                                June 30, 1997
             ___________________________________________________
                Principal         Interest          Maturity
                 Amounts           Rates              Dates
             _______________   _______________   _______________
             $   54,407,706     4.97% - 6.39%         1998
                 15,606,482     5.64% - 6.20%         1999
                  3,000,000         6.27%             2000
                    273,080         6.40%             2001
                  1,441,827     6.21% - 6.49%         2002
                    290,652         6.61%             2003
                  1,973,614     6.36% - 6.67%         2004
                  2,000,000         6.65%             2005
             _______________
             $   78,993,361
             ===============

</TABLE>


5.   New Accounting Pronouncements
     _____________________________

Statement of Financial Accounting Standards No. 128, "Earnings Per Share" 
("Statement 128") will be effective for the Company's December 31, 1997 quarter
end financial statements.  Statement 128 specifies the computation, 
presentation and disclosure requirements for earnings per share (EPS). It 
replaces the presentation of primary EPS with a presentation of basic EPS and 
fully diluted EPS with diluted EPS. Early application is not permitted.

<PAGE> 10
If the Company had adopted the provisions of Statement 128 for the quarter end 
September 30, 1997 basic earnings per share would be reported as $0.40 and 
diluted earnings per share would be reported as $0.34.


                     NORTHEAST BANCORP AND SUBSIDIARY
                                  Part I.

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

Description of Operations
_________________________

Northeast Bancorp (the "Company"), is a unitary savings and loan holding 
company with the Office of Thrift Supervision ("OTS") as its primary regulator.
The Company has one wholly-owned subsidiary, Northeast Bank, FSB (the "Bank"),
which has branches located in Auburn, Bethel, Harrison, South Paris, Buckfield,
Mechanic Falls, Brunswick, Richmond and Lisbon Falls, Maine.

Financial Condition 
___________________

Total consolidated assets were $265,441,708 on September 30, 1997, which 
represents an increase of $3,642,002 from June 30, 1997.  Total loans, 
securities available for sale and Federal Home Loan Bank ("FHLB") stock 
increased by $2,857,376, $2,705,277 and $243,000, respectively, while cash 
equivalents and loans held for sale decreased by $1,702,485 and $210,645, 
respectively, during the same period. Total deposits and repurchase agreements 
decreased by $406,133, while FHLB borrowings increased by $1,581,110, from June
30, 1997 to September 30, 1997.

The decrease in cash equivalents and the increase in FHLB advances were 
utilized to support the increase in securities available for sale and the
increase in the loan portfolio from June 30, 1997 to September 30, 1997.  FHLB
stock increased due to the increased levels of FHLB advances during the same 
time period.  The FHLB requires financial institutions to hold a certain level 
of FHLB stock based on advances outstanding.

Total loans increased by $2,857,376 for the three months ended September 30, 
1997.  The loan portfolio growth was in consumer installment and commercial 
loans.  On August 31, 1997, the Bank purchased approximately $5,000,000 of 1-4 
family mortgages.  The purchase consisted of 1-4 family adjustable rate 
mortgages secured by property located primarily in the state of Maine.  The 
Bank's local market, as well as the secondary market, continues to be very 
competitive for loan origination volume.  The local competitive environment and
customer response to favorable secondary market rates have affected the Bank's 
ability to increase the loan portfolio.  In the effort to increase loan volume,
the Bank's offering rates for its loan products have been reduced to compete in
the various markets, the Bank will experience some margin compression due to
decreased loan rates.

The loan portfolio contains elements of credit and interest rate risk.  The 
Bank primarily lends within its local market areas, which management believes 
helps them to better evaluate credit risk.  The Bank also maintains a well 
collateralized position in real estate mortgages. Residential real estate 

<PAGE> 11
mortgages make up 65% of the total loan portfolio, in which 53% of the 
residential loans are variable rate products, as compared to 69% and 47%, 
respectively, at September 30, 1996.  It is management's intent to increase the
volume in variable rate residential loans to reduce the interest rate risk in 
this area. 

Eighteen percent of the Bank's total loan portfolio balance is commercial real 
estate mortgages. Similar to residential mortgages, the Bank tries to mitigate 
credit risk by lending in its local market area as well as maintaining a well 
collateralized position in real estate.  Commercial real estate loans have 
minimal interest rate risk as 88% of the portfolio consists of variable rate 
products. 

Commercial loans make up 8% of the total loan portfolio, of which 69% are 
variable rate instruments.  The credit loss exposure on commercial loans is 
highly dependent on the cash flow of the customer's business.  The Bank 
attempts to mitigate losses in commercial loans through lending in accordance 
with the Company's credit policies.

Consumer and other loans make up 8% 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 Bank's known market areas.

Total deposits were $154,262,801 and securities sold under repurchase 
agreements were $4,840,375 as of September 30, 1997.  These amounts represent a
decrease of $147,886 and $258,247, respectively, compared to June 30, 1997.  
The decrease in deposits and repurchase agreements was due to normal business 
fluctuations.  Brokered deposits represented $7,388,663 of the total deposits 
at September 30, 1997.  The Bank utilizes brokered deposits as alternative 
sources of funds.  Brokered deposits are similar to local deposits, in that 
both are interest rate sensitive with respect to the Bank's ability to retain 
the funds.  Cross selling strategies are employed by the Bank to develop 
deposit growth.  Even though deposit interest rates increased during the first 
three months in fiscal 1997, the rate of return was much stronger in other 
financial instruments such as mutual funds and annuities.  Like other companies
in the banking industry, the Bank will be challenged to maintain and/or 
increase its core deposit base.

Total advances from the FHLB were $80,574,471 as of September 30, 1997, an 
increase of $1,581,110 compared to June 30, 1997.  The cash received from FHLB 
advances was utilized for the increase in the loan portfolio.  The Bank's 
current advance availability, subject to the satisfaction of certain 
conditions, is approximately $38,000,000 greater than the September 30, 1997 
advances reported. Mortgages, free of liens, pledges and encumbrances are 
required to be pledged to secure FHLB advances.  The Bank utilizes FHLB 
advances, as alternative sources of funds, when the interest rates of the 
advances are less than market deposit interest rates and to fund short-term 
liquidity demands for loan volume.  With the borrowing capacity at the Federal 
Home Loan Bank, the normal growth in bank deposits and repurchase agreements 
and the immediate availability of the Bank's cash equivalents as well as 
securities available for sale, management believes that the Company's available
liquidity resources are sufficient to support anticipated growth.
Total equity of the Company was $20,464,660 as of September 30, 1997 versus 
$19,900,613 at June 30, 1997.   Book value per common share was $14.27 as of 

<PAGE> 12
September 30, 1997 versus $14.04 at June 30, 1997.  Total equity to total 
assets of the Company as of September 30, 1997 was 7.71%.

At September 30, 1997, the Bank's regulatory capital was in compliance with 
regulatory capital requirements as follows:

<TABLE>
<CAPTION>

                                Northeast Bank, F.S.B.




                            Actual Capital   Required Capital   Excess Capital
                          Amount   Ratio    Amount    Ratio         Amount

                       ____________  ______  ____________  ______  ____________
<S>                    <C>           <C>     <C>           <C>     <C>        
Tangible capital       $ 18,384,000   6.99%  $  3,947,000   1.50%  $ 14,437,000
Core capital           $ 18,384,000   6.99%  $  7,894,000   3.00%  $ 10,490,000
Leverage capital       $ 18,384,000   6.99%  $ 10,526,000   4.00%  $  7,858,000
Risk-based capital     $ 19,534,000  12.21%  $ 12,802,000   8.00%  $  6,732,000

</TABLE>

The carrying value of securities available for sale by the Company was 
$29,802,208, which is $412,649 less than the cost of the underlying securities,
at September 30, 1997.  The difference between the carrying value and the cost 
of the securities was primarily attributable to the decline in the 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 the yields currently  received on this portfolio are 
satisfactory and intends to hold these securities for the foreseeable future.

The Bank's allowance for loan losses was $2,560,000 as of September 30, 1997 
versus $2,517,000 as of June 30, 1997, representing 1.22% of total loans for 
both of the reported periods.  The Bank had non-performing loans totaling 
$2,273,000 at September 30, 1997 compared to $2,424,000 at June 30, 1997. Non-
performing commercial mortgages increased by 24% from June 30, 1997 to 
September 30, 1997. This increase was due to the addition of a single loan and 
in management's opinion does not indicate a trend. Non-performing loans 
represented .86% and .93% of total assets at September 30, 1997 and June 30, 
1997, respectively.  The Bank's allowance for loan losses was equal to 113% and
104% of the total non-performing loans at September 30, 1997 and June 30, 1997,
respectively.   At September 30, 1997, the Bank had approximately $774,000 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. These substandard loans have been reduced substantially in
the past twelve months. The decrease was attributed to the reclassification of 
loans to lower risk classifications as a result of favorable changes in the 

<PAGE> 13
borrower's financial condition, indicating a decreased potential for these 
loans becoming non-performing assets.  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 Bank's non-
performing loans as of September 30, 1997 and June 30, 1997, respectively:
                                                             
<TABLE>
<CAPTION>

                                      September 30,         June 30,
             Description                  1997                1997
       _______________________        ______________     ______________       
       <S>                            <C>                <C>                
       1-4 Family Mortgages           $    625,000       $    983,000  
       Commercial Mortgages              1,133,000            913,000   
       Commercial Installment              486,000            492,000   
       Consumer Installment                 29,000             36,000   
                                      ______________     ______________
       Total non-performing           $  2,273,000       $  2,424,000
                                      ==============     ==============
</TABLE>

Although the growth in non-performing, delinquent and substandard loans have 
been reversed, management continues to allocate substantial resources to the  
collection area in an effort to control the amount of such loans.  The Bank's 
delinquent loan accounts, as a percentage of total loans, decreased during the 
September 30, 1997 quarter.  This decrease was largely due to improved 
collection efforts and the increase in the Bank's loan portfolio.

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: 

<TABLE>
              <C>           <C>          <C>          <C>
              12-31-96      3-31-97      6-30-97      9-30-97

                1.24%        1.52%        1.60%        1.23%

</TABLE>

At September 30, 1997, the Bank's total non-performing loans has approximately 
$630,000 of loan balances that are current and paying as agreed. Taking these 
current non-accrual loans into consideration, the Bank's total delinquencies 30
days or more past due, including delinquent non-performing loans, as a 
percentage of total loans would be .93% as of September 30, 1997. 

The level of the allowance for loan losses as a percentage of total loans has 
remained constant and the level of allowance for loan losses as a percentage of
non-performing loans at September 30, 1997 increased from June 30,1997.  Total 
delinquencies as a percentage of total loans decreased during the quarter ended
September 30,1997. 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, management evaluates the adequacy of the 
allowance for loan losses.  The process to evaluate the allowance involves a 

<PAGE> 14
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.  

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 Bank's allowance for loan losses.  Such 
agencies may require the Bank 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 Bank's most recent examination by the OTS was 
on September 22, 1997.  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, 1997 was $552,841.  
Primary earnings per share was $.38 and fully diluted earnings per share was 
$.34 for the quarter ended September 30, 1997.  This compares to earnings of 
$184,261 or primary and fully diluted earnings per share of $.11 for the 
quarter ended September 30, 1996.

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 Ratio.  Institutions with SAIF deposits were
required to pay an 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.  This resulted in an expense of $380,000 which 
was reflected in the Company's September 30, 1996 quarter end financial 
statements.  The net effect of the 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.  Commencing in 2000 and 
continuing through 2017, banks would be required to pay a flat annual 
assessment of 2.43 cents for every $100 of domestic deposits.

The Company's net interest income was $2,492,079 for the three months ended 
September 30, 1997, versus $2,283,952 for the three months ended September 30, 
1996, an increase of $208,127.  Total interest income increased $679,639 during
the three months ended September 30, 1997 compared to the three months ended 
September 30, 1996, resulting from the following items: (I) interest income on 
loans and loans held for sale increased by $757,875 for the three months ended 
September 30, 1997 resulting from a $835,194 increase due to an increase in the
volume of loans, which was offset by a decrease of $77,319 due to decreased 
rates on loans;  (II) interest income on investment securities decreased by 
$124,729 resulting from a $91,017 decrease due to a decrease in volume as well
as a decrease of $33,712 due to decreased rates on investments; and  (III) 
interest income on short term liquid funds increased by $46,493 resulting from 

<PAGE> 15
a $43,758 increase due to an increase in volume as well as an increase of 
$2,735 due to increased rates on FHLB overnight and other deposits.

The increase in total interest expense of $471,512 for the three months ended 
September 30, 1997 resulted from the following items:  (I) interest expense on 
deposits increased by $153,115 for the three months ended September 30, 1997 
resulting from a $134,777 increase due to an increase in the volume of deposits
as well as an increase of $18,338 due to increasing deposit rates;  (II) 
interest expense on repurchase agreements increased by $10,169 due to an 
increase of $10,665 in the volume of repurchase agreements, which was offset by
a decrease of $496 due to a decrease in rates; and  (III) interest expense on 
borrowings increased by $308,228 for the three months ended September 30, 1997 
resulting from an increase of $329,264 due to an increase in the volume of 
borrowings offset by a decrease of $21,036 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. 

<TABLE>
<CAPTION>

                           Northeast Bancorp
             Rate/Volume Analysis for the three months ended
              September 30, 1997 versus September 30, 1996

                                    Difference Due to
                                 Volume       Rate       Total
                                ____________   ____________   ____________
      <S>                       <C>            <C>            <C>         
      Investments               $  (91,017)    $  (33,712)   $  (124,729) 
      Loans                        835,194        (77,319)       757,875  
      FHLB & Other Deposits         43,758          2,735         46,493  
                                ____________   ____________   ____________
      Total                        787,935       (108,296)       679,639    

      Deposits                     134,777         18,338        153,115
      Repurchase Agreements         10,665           (496)        10,169
      Borrowings                   329,264        (21,036)       308,228
                                ____________   ____________   ____________
      Total                        474,706         (3,194)       471,512  
                                ____________   ____________   ____________
      Net Interest Income       $  313,229     $ (105,102)    $  208,127
                                ============   ============   ============
</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 22% of the Bank's loan portfolio is comprised of floating rate 

<PAGE> 16
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 35% of 
other loans in the Bank'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 FHLB 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
Bank's loan portfolio, deposit and advance rates paid by the Bank and loan 
volume.

Total non-interest income was $540,306 for the three months ended September 30,
1997 versus $505,684 for the three months ended September 30, 1996.  Service 
fee income was $262,566 for the three months ended September 30, 1997 versus 
$267,949 for the three months ended September 30, 1996.  The $5,383 service fee
decrease for the three months ended September 30, 1997 was primarily due to a 
reduction in loan servicing and deposit fee income.  Income from available for 
sale securities gains was $107,996 for the three months ended September 30, 
1997 versus $28,300 for the three months ended September 30, 1996. The Company 
sold some of its available for sale securities during the three month period 
ended September 30, 1997, taking advantage of the fluctuation in market prices 
in the mortgage-backed security portfolio.  Income from trading account 
securities was $1,797 for the three month period ended September 30, 1997 
versus $61,366  for the three month period ended September 30, 1996.  Larger 
gains on the trading account portfolio was attained in the three month period 
ended September 30, 1996, due to the sale and appreciation in the market values
of the securities classified as trading in that time period. 

Other income was $167,947 for the three months ended September 30, 1997, which 
was an increase of $19,878 when compared to other income of $148,069 for the 
three months ended September 30, 1996.  The increase in other income in the 
three months ended September 30,1997, was primarily due to income generated 
from the Bank's trust department and revenue from the sale of investments to 
customers through the Bank's relationship with Commonwealth Financial Services,
Inc..

Total operating expense, or non-interest expense, for the Company was 
$2,016,005 for the three months ended September 30, 1997 versus $2,343,829 for 
the three months ended September 30, 1996.   The increase in occupancy and 
equipment expense for the three months ended September 30, 1997 was due to 
costs associated with the new branch opened in Auburn, Maine as well as normal 
growth and maintenance.  Other expenses decreased by $29,765 for the three 
months ended September 30, 1997, compared to September 30, 1996.  The decrease 
in other expenses was primarily due to the reduction in deposit insurance and 
loan expenses.  As previously discussed above, the Company's operating 
expenses, for the three months ended September 30, 1996, increased primarily 
due to the FDIC-SAIF deposit insurance assessment of $380,000.  Excluding the 
deposit assessment, the Company's operating expenses were $1,963,829 for the 
three months ended September 30, 1996.

Merger
______

On May 9, 1997 the Company entered into a definitive agreement to merge the 
Bank with Cushnoc Bank and Trust Company (Cushnoc) of Augusta, Maine. The 
agreement had been approved by the Company's and Cushnoc's Board of Directors 
and was subject to approval by Cushnoc's shareholders. On August 29, 1997, the 

<PAGE> 17
Company received approval from OTS, subject to certain conditions, to merge the
Bank and Cushnoc. On October 14, 1997, a special shareholders meeting was held 
by Cushnoc at which its shareholders voted to approve the merger of the Bank 
and Cushnoc. The merger of the Bank and Cushnoc was completed on October 24, 
1997.  At September 30, 1997, Cushnoc had approximately $21,000,000 in total 
assets and $2,200,000 in stockholders' equity. Under the terms of the 
agreement, the Company issued 2.089 shares of its common stock for each share 
of Cushnoc, which has 90,000 common shares outstanding. The acquisition will be
accounted for under the pooling of interest method.

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, 
1997.  For information regarding the Company's market risk, refer to the Annual
Report on Form 10-K dated as of June 30, 1997.


Forward - Looking Statements
____________________________

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. 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 "may", "will", "believe", "expect", 
"estimate", "anticipate", "continue", or similar terms or variations on those 
terms, or the negative of those terms. 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, the financial securities markets, and 
the availability of and the costs associated with sources of liquidity.


                   NORTHEAST BANCORP AND SUBSIDIARIES
                      Part II - Other Information

Item 1.   Legal Proceedings
          _________________

<PAGE> 18

Not Applicable.

Item 2.   Changes in Securities
          _____________________

(a)       Not applicable.

(b)       Not applicable.

(c)       Not applicable.


Item 3.   Defaults Upon Senior Securities
          _______________________________

Not Applicable.


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

Not Applicable.


Item 5.   Other Information
          _________________  

(a)       Not applicable


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

(a)       Exhibits
          ________

          2.1 Agreement and Plan of Merger dated as of May 9, 1997 by and among
              Northeast Bancorp, Northeast Bank, FSB and Cushnoc Bank and Trust
              Company incorporated by reference to Exhibit 2 to Northeast 
              Bancorp's Registration Statement on Form S-4 (No. 333-31797) 
              filed with the Securities and Exchange Commission.
                                    
11        Statement regarding computation of per share earnings.

27        Financial data schedule

(b)       Reports on Form 8 - K
          _____________________

          No reports on Form 8 - K have been filed during the quarter ended 
          September 30, 1997.



                   NORTHEAST BANCORP AND SUBSIDIARIES
                               Signatures
                                    
<PAGE> 19
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 12, 1997


                     NORTHEAST BANCORP AND SUBSIDIARIES
                            Index to Exhibits
                                    
                                    
EXHIBIT NUMBER                        DESCRIPTION                           
______________          _____________________________________________________ 

     11                 Statement regarding computation of per share earnings 

     27                 Financial Data Schedule